Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

ROYAL ASSENT

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Act:
Participation Agreements Act 1978.

Oral Answers to Questions — NATIONAL FINANCE

Development Land Tax

Mr. Geoffrey Johnson Smith: asked the Chancellor of the Exchequer what organisations, or representative bodies, have made representations to him about the development land tax: and if he will make a statement.

The Chief Secretary to the Treasury (Mr. Joel Barnett): I will circulate in the Official Report a list of those bodies which have made representations to date.

Mr. Johnson Smith: They must be fairly numerous. When he is considering these representations will the Chief Secretary bear in mind particularly the complaint of the Chairman of British Rail, who feels that the high incidence of this tax prevents the effective commercial development of British Rail sites? Such developments could alleviate unemployment and contribute much to the revenue to help the hard-pressed commuter in the South-East.

Mr. Barnett: I listen most carefully to all the representations that I receive. I have taken very careful note of what the Chairman of British Rail said.

Mr. Frank Allaun: Does the Chief Secretary agree that the real situation is

that some property landowners are deliberately holding back in the hope of squeezing the British public even more and avoiding tax on unearned profits in the event of a Tory election victory? Will he reject completely this type of pre-Budget pressure by the British Property Federation and Conservative Members?

Mr. Barnett: From time to time I agree with my hon. Friend, and certainly on this occasion I do. But there is no evidence yet of any shortage of land or of any holding back for the reasons that he has stated. If landowners are holding back for these reasons they are very foolish indeed, because they may have to wait for decades, or even for ever.

Mr. MacKay: Contrary to the Chief Secretary's last answer, is he aware that there is a desperate shortage of house building land in this country because of the excessively high rates of development land tax? Surely this will mean a spiral-ling of house prices, which will adversely affect first-time house buyers. Will he not do something about that situation?

Mr. Barnett: I would if that were true. There is about six years' supply of residential land with planning permission available, half of which is in the hands of builders.

Mr. Peter Rees: Will the Chief Secretary consider deferring the introduction of the 80 per cent. rate while he considers the devastation that this Act has already inflicted on the development market?

Mr. Barnett: I do not accept the premise of the hon. and learned Member's question.

Following is the list:

CBI
National Federation of Building Trade Employers (on behalf of the Housebuilders Federation)
The Law Society
The National Farmers Union
The Country Landowners Association
The Country Gentlemen's Association Ltd. The National Federation of Builders and Plumbers Merchants
SBA—the Association of Independent Businesses

Interest Rates

Mr. Watkison: asked the Chancellor of the Exchequer if he remains satisfied with the level of interest rates.

The Chancellor of the Exchequer (Mr. Denis Healey): Yes, Sir, though I keep the position constantly under review.

Mr. Watkinson: Will the Chancellor resist the pressure which seemed to appear at the beginning of this week to increase interest rates? On the contrary, will he do everything possible to push them down, because this is vital for industrial expansion and particularly significant to the small business community, which we want to promote?

Mr. Healey: Interest rates should be as low as is consistent with the general welfare of the economy. I know that my hon. Friend shares my pleasure in the fact that the minimum lending rate is now 6 points below the level that I inherited from the previous Government. Mortgage rates are 2½ per cent. below the level that I inherited. That means that a person with a new £10,000 mortgage is £250 a year better off than he was a year ago.

Mr. Jay: Will the Chancellor note that while this reduction is extremely welcome, interest rates are still too high? Will he not agree that there is every conceivable reason for bringing them down further in present circumstances? With our much lower rate of inflation and the fact that there are no exchange rate problems this should be possible.

Mr. Healey: I hope that it will be possible. However, one must consider interest rates as one of a number of variable contributions to the welfare of the economy.

Mr. Higgins: Is it the case that the rate of increase in M3 is about the same—working on a three-months' basis—as that which the Chancellor inherited? Does this have an implication for interest rates?

Mr. Healey: I would love to answer that question, but parliamentary protocol prevents my doing so because there is a later Question about that very point.

Developing Countries (Debts)

Mr. Hooley: asked the Chancellor of the Exchequer if he will endeavour to organise a special meeting of Commonwealth Finance Ministers to discuss the problem of external indebtedness of non-oil-exporting developing countries within the Commonwealth.

The Financial Secretary to the Treasury (Mr. Robert Sheldon): The Government regularly have discussions with Commonwealth and other developing countries in which the question of their balance of payments and debt is covered. UNCTAD is the forum in which the debt issue is fully considered. We hope there will be a constructive review of this problem at the Ministerial Trade and Development Board in the week after next.

Mr. Hooley: Is my right hon. Friend aware that some countries—Sweden, Canada, and one or two others—have already cancelled the debts of the poorest of their debtors in the developing countries? Since, apparently, it is Government policy to deal with these matters case by case, will he consider cancelling the debts of countries whose per capita income is less than $200?

Mr. Sheldon: My right hon. Friend is right to say that these matters are dealt with on a case-by-case basis. That is the purpose of the Ministerial Trade and Development Board. Not all these countries have the same problems. They all have their individual problems, and I believe that the forum of UNCTAD, in which these matters are to be discussed the week after next, is the best place for that process to take place.

Mr. Maurice Macmillan: Does the Minister accept that this is an aspect of a wider problem, involving oil money that is not available for long-term investment? It causes Governments world wide to create debts. Should not that money be mopped up so that it will not add to inflationary pressures? Do Her Majesty's Government have any plans, with their partners in Europe or with other countries, to take positive action to mitigate the evils of the effects of excess savings over investment?

Mr. Sheldon: The right hon. Gentleman is right, because the indebtedness of these less developed countries has grown compared with the situation in the 1960s. Last year serious problems were foreseen and there were fears that a default position would lead to further failings. Fortunately, those fears have not been realised. There is a great amount of international co-operation in this matter, and the meeting that is about to take place will


deal with these problems. I believe that that is the right forum for such discussions.

National Economic Development Council

Mr. Dykes: asked the Chancellor of the Exchequer when he next intends to chair a meeting of the National Economic Development Council.

Mr. Healey: I hope to take the chair at the next meeting on Wednesday 1st March 1978.

Mr. Dykes: Does the right hon. Gentleman agree that although there was some improvement in the British economy in respect of financial statistics there has not yet been any improvement in real performance? Will he say to what extent the NEDC is worried about this matter, in terms of priority? Bearing in mind the deterioration in our terms of trade and volume of exports in recent months, may I ask what plans the NEDC has on specific headings to try to obtain a programme for real economic recovery?

Mr. Healey: I welcome the tribute made by the hon. Gentleman to the improvement in our financial situation. It is true that so far this has not been adequately reflected in the behaviour of output or employment, although there was an increase last year in the volume of private manufacturing investment, which is part of the real economy, of between 12 per cent. and 13 per cent. The hon. Gentleman will be aware of the substantial increase in retail sales in the last two months. We can expect that to be reflected in the coming months in the build-up of stocks and new production.

Mr. Skinner: Has my right hon. Friend seen the forecast by the Cambridge Economic Group with its devastating comments about unemployment not only in the next two decades but much earlier—as near as 1980, and going on to 1985? On that basis, does he think that in the next Budget and succeeding Budgets it will be necessary to err on the side of Benn rather than other pressure groups, whose views have been made known?

Mr. Healey: I am not sure what abstract economic concept is intended by the word "Benn". I am not familiar with that concept. In regard to the Cambridge Economic Group and its fore-

casts, I study these matters with the attention they deserve. I remind the House that the Cambridge Economic Group told me three years ago that our balance of payments deficit would increase with our public sector deficit. That forecast turned out to be entirely wrong.
There should be scope for some stimulus to the economy in the next Budget, and I am sure that my hon. Friend will be glad to know that I propose to take full advantage of that scope.

Sir G. Howe: Will the right hon. Gentleman confirm that the national output in each quarter of last year was running at a rate below that achieved in 1973, and that there is no sign whatever of the upturn forecast in his Budget last autumn? Will he also confirm that, as has been reported, the Prime Minister does not share his optimism about the future of the economy? Will he tell members of the NEDC that they would be better advised to agree with the Prime Minister than to accept his own views?

Mr. Healey: I must warn the hon. Gentleman not to rely on Press reports by people who were not present at the meeting concerned, but to rely instead on the denial of those reports by both the TUC General Council and the Labour Party National Executive Committee, whose members attended an excellent meeting with me on Tuesday morning.

Industrial Buildings Allowances (Hotels)

Mr. Adley: asked the Chancellor of the Exchequer if he intends to allow hotels to qualify for industrial building allowances, as pertains in the other eight EEC countries; and if he will make a statement.

Mr. Hicks: asked the Chancellor of the Exchequer what representations he has received that hotels should be eligible for industrial building allowances; and if he will make a statement.

Mr. Robert Sheldon: My right hon. Friend has received a number of representations on this point. I have noted the suggestion of the hon. Member for Christchurch and Lymington (Mr. Adley) but I cannot anticipate the Budget Statement.

Mr. Adley: Since the Minister knows my interest in the industry, will he accept that the non-classification of hotels for


the industrial building allowance is the greatest single barrier to new investment and job creation? Does he agree that the notional tax loss that would be suffered if the proposal in my Question were implemented should be well and truly out-weighed by the new investment that would result if hotels were so classified?

Mr. Sheldon: We are now examining this matter. The cost of extending the industrial building allowance to new hotel building would be about £30 million The hon. Gentleman must remember the considerable assistance that is already being given by means of capital allowances, which cover up to one-third, or even more, of the cost of building new hotels or additions to them.

Mr. Hicks: Does the Minister agree that a notional tax loss of approximately £30 million would bring far more benefits to the economy than would some of the payments made by this Government to other sectors of economic activity?

Mr. Sheldon: I have no doubt that the development of hotels would be advantageous, and we shall do our best to encourage that activity. On the question of the indusrial building allowance being extended to the hotel industry, I would point out that the Treasury is now examining the matter. If we have anything to report, it will be done in the course of the Budget debates.

Mr. Michael Shaw: Will the Minister bear in mind the competition between British hotels and hotels abroad, which is very keen? Does he appreciate the severe disadvantage suffered by those who wish to invest in new buildings and to modernise buildings because there are not the super profits to put into vast new ventures unless an allowance of this nature is made?

Mr. Sheldon: I do not accept all that the hon. Gentleman says. Clearly, there is still a considerable amount of hotel development taking place, but there is enough in this point to warrant the further examination that is being given to the matter.

Productive Potential

Mr. Radice: asked the Chancellor of the Exchequer what is his current estimate of productive potential.

Mr. Joel Barnett: I have no reason to change the view that my right hon. Friend gave on 10th November 1977, that the growth in productive potential is now about 3 per cent. a year, at 1970 prices.

Mr. Radice: Will the Minister explain the curious combination of stagnant output on the one hand and, at the same time, falling unemployment and an increasing number of vacancies?

Mr. Barnett: There is no simple explanation. This proposition has bothered many economists and others. In the past year one would not have expected to see the decline that has occurred in the unemployment figures in the last five months. We are glad of that, but I am sure that my hon. Friend will agree that we should seek to bring down the unemployment level even more.

Mr. Peter Bottomley: If productive capacity is growing by 3·3 per cent. per year, what positive advantage is there in having a level of pay settlements that exceeds that figure?

Mr. Barnett: I cannot see what that has to do with the Question.

Mr. Powell: If the growth of potential is being stated in percentage terms, does it matter what prices it is conceived in?

Mr. Barnett: It just so happened that it seemed the most convenient way to present it.

Mr. MacFarquhar: What likelihood is there of a growth in industrial investment in a period of stagnation in production?

Mr. Barnett: We want to see an increase in productive potential, productivity and growth of output. These are our objectives and will remain so. My right hon. Friend certainly hopes to do something about that in the Budget.

Mr. Lawson: The Chief Secretary may well want to see an increase in the rate of growth and in productive potential—that was the whole point of the industrial strategy—but is he aware that growth of productive potential was higher than 3 per cent. when the Government took office and has gone down since then? Is that not an indictment of the Government's whole industrial strategy?

Mr. Barnett: I do not think so. If the hon. Gentleman looks a little further into


what was happening before 1974, he will see that the situation that we inherited was appalling, and he and his hon. Friends presided over that.

Agricultural Businesses (Tax Liability)

Mr. Rost: asked the Chancellor of the Exchequer what representations he has received suggesting three-year averaging of tax liability for agricultural business.

Mr. Robert Sheldon: I have received a number of representations on these lines from organisations representing farmers.

Mr. Rost: Is it not time the Treasury acknowledged that there can be wide fluctuations in incomes, particularly for small farmers and market gardeners such as the potato growers in my area of Derbyshire? Should not the Treasury accept that this would be a sensible assistance to farmers and would not necessarily mean any lost revenue?

Mr. Russell Kerr: Well spoken, spud

Mr. Sheldon: There have been a number of representations, and some have included the suggestion of an investment reserve scheme for farmers. This proposal is under examination. In relation to the averaging of incomes generally, or even for groups within the community, there are formidable administrative problems that have been recognised by various commissions. An investment reserve scheme merits closer scrutiny and is now receiving it.

Mr. Watkinson: Has my right hon. Friend received any representations from the Minister of Agriculture? Is there not a great deal of support for this idea within the Government, and would it not assist farmers and be of benefit to agriculture?

Mr. Sheldon: It is one of the proposals under consideration. My hon. Friend will surely appreciate that there are difficulties in moving in this direction. Averaging was turned down by the Radcliffe Committee, which called it an administrative impossibility. Of course, things have changed since then, but there are problems that have to be looked at closely.

Mr. Watt: Does the right hon. Gentleman appreciate that agriculture is one of the few industries in this country with real growth potential? Does he realise

that adopting a system of three-year averaging would do more to restore the confidence of farmers than virtually any measure that the Minister of Agriculture could introduce?

Mr. Sheldon: I must remind the House that the possibility of averaging does not apply only to agriculture. There is a whole range of trades and industries that experience violent fluctuations in income and there are great problems in drawing the line over the period in which these accounts have to be looked at. There are practical problems which have to be considered, and they are under examination.

Mr. Peter Rees: Will the right hon. Gentleman avoid being over-oppressed by the technical difficulties and recognise the urgent need for some sort of relief in the next Finance Bill? Will he press on with the examination of investment reserve relief and take the Australian scheme as a useful precedent?

Mr. Sheldon: This is under examination. I can say no more except that at the time of the Budget debates these matters can be examined further and the Government's proposals, or whatever may be brought to the House, can be considered.

Historic Buildings and Works of Art

Mr. Bulmer: asked the Chancellor of the Exchequer whether he will introduce further fiscal and other measures to protect the national heritage of buildings and works of art.

Mr. Joel Barnett: The latest public expenditure plans provide for an increase in the money available for the purchase of heritage items, their preservation and display and for expenditure on historic buildings and ancient monuments.

Mr. Bulmer: Will the right hon. Gentleman consult his colleagues who bear responsibility for these matters with a view to ensuring that the Tate Gallery can acquire Gainsborough's portrait of Sir Benjamin Truman? Will he also look at the present tax structure, which seems designed to ensure that an increasing number of works of art of national importance come on to the market and that neither British citizens nor British galleries have the funds to acquire them?

Mr. Barnett: The hon. Gentleman will know that this is a matter for my noble Friend the Minister with responsibility for the arts. If my noble Friend does not have sufficient funds to deal with this matter, he will no doubt approach me, though my colleagues who have to approach me for more funds are reluctant to do so.

Mr. Faulds: As a cultured animal—

Mr. Adley: The hon. Gentleman or the Chief Secretary?

Mr. Faulds: Both. Is my right hon. Friend aware of the real dangers to the retention of the national heritage in buildings and works of art, such as Gainsborough's superb portrait of Ben Truman, which has just been mentioned, the export of which is more likely and the survival of the buildings the less likely because of our tax policies and because not enough Government funding is provided for the retention of our heritage?

Mr. Barnett: As one cultured animal to another, I am always ready to try to do as much as I can to help in this area. I know that my hon. Friend will not under-estimate what we are spending already. The total amount planned to be spent in 1978–79 in this area is £108 million.

Mr. Faulds: It is not enough.

Mr. Barnett: I appreciate that my hon. Friend has a right to ask me to spend more, but Opposition Members do not have the same right.

Mr. Robert Cooke: Will the right hon. Gentleman remember that capital transfer tax on the private capital resources required to support the heritage and to prevent a flood of sales taking place is an absolute killer, and that he should turn his attention to that?

Mr. Barnett: If the hon. Gentleman were in a more reasonable mood, he would accept that his proposition is nonsense. Most reasonable people in the heritage lobby know that we have done an enormous amount to help with capital transfer tax.

Mr. Hooley: Does my right hon. Friend agree that, apart from acquisition and retention, there is no point in keeping these things if they remain buried in the cellars of our museums and galleries

where 99 per cent. of our people cannot see them? There is not enough funding to allow the majority of people to see famous works of art in travelling exhibitions, and so on.

Mr. Barnett: I have a great deal of sympathy with my hon. Friend's view. I should like to see more works of art available for public gaze. The whole purpose of the reliefs that we have provided in capital transfer tax is to do precisely that.

Sir David Renton: What are the Government doing to protect and replenish the National Land Fund, and to what purpose will it be put in future?

Mr. Barnett: The right hon. and and learned Gentleman will know that the Fund is being examined by a Select Committee. We are awaiting its report and will comment upon it.

Mr. Peter Rees: Is the right hon. Gentleman satisfied with the relief available under the last Finance Act for maintenance funds? If so, can he tell us how many people have so far taken advantage of the provision?

Mr. Barnett: No one has yet taken advantage of it, but that is not surprising. The hon. and learned Gentleman is a lawyer and he knows that setting up trust funds takes a little time. I understand that some funds are firmly in mind to be set up. When hon. Members on the Opposition Benches laugh about the question of relief for the heritage, they should understand that those engaged in the heritage are not as interested in becoming an over-privileged class as those hon. Members seem to imply.

Endangered Species Act

Mr. Hardy: asked the Chancellor of the Exchequer what arrangements for training and consultation have been made to safeguard the ability of Her Majesty's Customs and Excise to ensure that the provisions of the Endangered Species Act will be met.

Mr. Robert Sheldon: The training of Customs officers covers the enforcement of import and export restrictions including those imposed by the Endangered Species (Import and Export) Act 1976. There are also written instructions relating to each restriction. Expert advice is


made available by the Department of the Environment when required.

Mr. Hardy: Is my right hon. Friend aware that there is growing concern at the demanding tasks of recognition of the items covered by the Act? Will he consult further to ensure that Britain's high reputation in this area of responsibility is maintained? Does he agree that the import of ivory in the last two years, which may have accounted for between 2,000 and 3,000 elephants, scarcely helps to maintain that reputation?

Mr. Sheldon: I think that my hon. Friend will accept that the training of Customs officers is adequate to deal with the problem that he has in mind. The quantities that have been imported are less than those that have been licensed. If my hon. Friend is seeking to reduce the number of licences that are made available, he will need to put that point to the appropriate Department.

Mr. Rifkind: Will the Government consider extending the provisions of the endangered species legislation to include the self-employed?

Pay Settlements (Government Action)

Mr. Flannery: asked the Chancellor of the Exchequer what plans he has to apply the 10 per cent. guidelines in 1978–79; and on what criteria his decision depends.

Mr. Healey: It is far too early to expect me to have firm plans.

Mr. Flannery: Does my right hon. Friend agree with me that the intractable problem of unemployment can be only partially solved if the stimulus to which he referred in answering an earlier Question from my hon. Friend the Member for Bolsover (Mr. Skinner) is applied to the economy? Does he further agree that production is allied to stimulus being given to the economy and that it is almost idle to want unemployment figures to drop, a stimulus to be given to the economy and production to be expanded, unless the stimulus to which he referred is given to the economy fairly quickly?

Mr. Healey: Of course, I accept that, but I think that one has to relate it to the question that my hon. Friend asked. The fact is that any stimulus that I give

to the economy is liable to lead to a dangerous extent into imports and inflation unless we can narrow the gap that exists in Britain between productivity and earnings to about the size of that of most of our trading partners. It is in this area that the question of the level of earnings will remain important.

Mr. Michael Latham: Will the Chancellor let us into the secret of how he is getting on with the discussions with the CBI over the publication of the black list? May we, particularly, expect to have the names of those on the black list and on the white list before a new black list is drawn up for stage 4?

Mr. Healey: That Question is stupe-fyingly irrelevant to the original one. I do not propose to be led by the hon. Member into breaking the confidentiality of discussions with the major employers' organisation in this country.

Mr. Litterick: Will the Chancellor of the Exchequer devote rather less of his mental energies to the problem of holding people's wages down and rather more to fulfilling his Government's side of the social contract, which would release productive energy and regenerate the economy?

Mr. Healey: My hon. Friend has a later Question on this matter, which I shall answer. The extent to which any stimulus that a Chancellor is to give to the economy increases employment depends on the extent to which British industry is competitive. The level of earnings in relation to productivity is the central issue in this regard.

Mr. Peter Walker: The Chancellor's original guidelines, he will recall, were an increase of 6 per cent. or 7 per cent. on wage rates and 10 per cent. on earnings. Are his guidelines now 10 per cent on wage rates and 14 per cent. to 15 per cent. on earnings?

Mr. Healey: The right hon. Gentleman knows as well as I do that the guidelines as given in the White Paper are that we wish the increase in earnings for the nation as a whole to be limited to about 10 per cent. All the indicators are that although that limit may be slightly overtaken, it will be very much less exceeded than Conservative Members were telling us some months ago. No one was more


gloomy in his predictions than the right hon. Gentleman. I hope that we shall receive congratulations from him on the success of the policy so far.

Sir G. Howe: Will the Chancellor reconsider his answer to my hon. Friend the Member for Melton (Mr. Latham)? Does he agree that it is of the greatest importance for the country to know whether he even has it in mind to continue into next year rigid guidelines of the kind that have proved so intolerable this year? Does he agree that British industry is becoming increasingly resentful about the impossible obligations that he is seeking to impose upon it in the new terms of contract, and that unless he makes it clear that they are not to be placed under an obligation of this kind, he is bound to get a hostile reaction from British industry?

Mr. Healey: The right hon. Gentleman seems very badly out of touch with organisations which purport to represent British industry, which have given and are giving full support to the Government's pay policy, which accept the need for sanctions to support that pay policy, and which have discussions with us about some aspects of the latest addition to those sanctions, namely, the contract clauses.

£ Sterling

Mr. Knox: asked the Chancellor of the Exchequer by what percentage the value of the £ sterling has fallen since March 1974.

Mr. Healey: From the average levels of March 1974 until 20th February 1978 the spot rate for sterling against the United States dollar has fallen by 16·4 per cent. and the trade-weighted effective index has declined by around 20 per cent.

Mr. Knox: Are those disgraceful figures not a terrible indictment of the Government's record over four years in power? What does the Chancellor intend to do to ensure that this is not the pattern over the next year?

Mr. Healey: The hon. Member will be as aware as I am that the reason for the decline of sterling was the fact that we ran a big balance of payments deficit in the early years of this period, almost entirely because of the increase in oil prices and the fact that our inflation rate was substantially higher than that of our competitors—again largely because of the

increase in oil prices. The hon. Member will also be aware that we have now eliminated our balance of payments deficit and brought down our annual inflation rate to below the level that we inherited from the Conservative Party.

Mr. Litterick: Does the Chancellor of the Exchequer agree, however, that a high exchange value of sterling would not be an unqualified blessing to the British people?

Mr. Healey: That is a controversial issue, on which there are many views from both sides of the House. My own opinion is that the present level of sterling is, on balance, not damaging to the economy, but I accept that a substantial increase in the value of the pound, unless we can bring our rate of inflation down and reduce the level of our wage costs, would be damaging to our industrial performance.

Mrs. Kellett-Bowman: Does the Chancellor of the Exchequer accept that his reply to the Question is quite horrifying? Will he also bear in mind the answer that his hon. Friend gave to Question No. 7, about the effect of a three-year averaging of tax liability applying to other industries besides that of agriculture? Will he bear in mind that agriculture is the only industry which pays for its input in real money and gets green pounds in return, and will he act accordingly?

Mr. Healey: The hon. Lady will not expect me to agree with the first part of her question. As to the second part, which has absolutely nothing to do with the original Question that is before the House, all I can say is that the performance of British agriculture is due, as was said by the Duke of Northumberland, who chairs the National Economic Development Committee on Agriculture, largely to the fact that it has operated a planning agreement with the Government for many years.

Motor Cars (Hire Purchase)

Miss Joan Lestor: asked the Chancellor of the Exchequer what consultations he has had with the motor industry regarding the hire-purchase terms for car purchase.

Mr. Robert Sheldon: My right hon Friends and I have consultations with


representatives from the motor industry on a wide range of issues. Hire-purchase controls are among the items discussed.

Miss Lestor: Does my right hon. Friend agree that the British car industry is being undermined by the fact that our foreign competitors within the EEC are offering low interest rates or interest-free loans to car producers? Therefore, will he consider approaching the Bank of of England, through the NEB, with a view to getting extensive credit facilities for the motor car industry in this country?

Mr. Sheldon: I do not think that extending hire-purchase arrangements is the way to handle this problem. The motor car industry is very much against the extension of hire purchase, because of the problems of supply. Although the finance houses and the distribution areas are anxious to see this extension, their view is not shared by those who produce the cars.

Taxation Proposals (Inland Revenue Staff)

Mr. George Rodgers: asked the Chancellor of the Exchequer if he is satisfied that adequate Inland Revenue staff is available to administer and implement any budgetary proposals relating to taxation.

Mr. Joel Barnett: Yes. The staffing of the Inland Revenue is kept under con-stand review to ensure that it is adequate to cope with Budget proposals and other tasks which the Department has to undertake.

Mr. Rodgers: Does my hon. Friend accept that the Inland Revenue staff, by definition, is probably the least popular section of the work force? None the less, does he agree that he should undertake a recruitment campaign because of the overwork and lack of manpower in the Department? This could well be financed by devoting some of the extra personnel to the detection of fraud and evasion, which are apparently still rampant in the country?

Mr. Barnett: My hon. Friend says that the Inland Revenue Staff Federation members are unpopular. Those who know them know that they do a first-class job. There is no reason why they should be unpopular. That being said,

I understand that nobody is happy to have his tax taken from him. We are aware that there is a need for increased staffs and we are doing everything to ensure that we find suitably qualified people.

Mr. Cope: Does the Chief Secretary agree that a large part of the reason for the vast increase that has already taken place in the Inland Revenue staff is the tremendous increase in the complexities of income tax that have taken place, to such an extent that the income tax law books are now larger than the London telephone directories? Will he therefore give plenty of attention between now and the Budget to the desirability of bringing forward proposals then to simplify the income tax Acts?

Mr. Barnett: I am aware of the need for some simplification, but most of the representations that I receive would, if acted upon, tend to make the tax system even more complicated.

Mr. R. C. Mitchell: Does my right hon. Friend remember that in 1969 the then Chancellor, Mr. Roy Jenkins, told the House that it would take 10 years for the Inland Revenue to be sufficiently computerised to introduce a proper tax credits and negative income tax system and to do away with the multiplicity of social benefits that we now have? Is the Inland Revenue keeping up to that date, and will all that be ready in 1979?

Mr. Barnett: My hon. Friend should be aware that the tax credits system that was being discussed between 1970 and 1974 would not have done away with the great majority of means-tested benefits. Computerisation is proceeding, and I hope that it will be ready before too long.

Mr. Peter Rees: If the right hon. Gentleman is not moved by any other argument, will he undertake that no wealth tax will be introduced, so as not to put any additional strain on the Inland Revenue machine?

Mr. Barnett: No, Sir.

Dividend Control

Mr. Neubert: asked the Chancellor of the Exchequer how many companies have qualified for exemption from dividend control within the last 12 months.

Mr. Joel Barnett: Fifty-four companies qualified for exemption from dividend control within the 12 months to the end of January on the ground that their operations are almost exclusively overseas under provisions first introduced on 20th October 1975.

Mr. Neubert: Is the Chief Secretary not concerned at the evidence found by the Central Statistical Office of a decline in individual investment in stocks and shares? To what extent does he attribute that loss, in recent years, to continuing dividend control?

Mr. Barnett: Not a lot, actually. There are many reasons for the point that the hon. Gentleman made, but I doubt whether dividend control is a major cause.

Money Supply

Mr. Ridley: asked the Chancellor of the Exchequer if he is satisfied that the money supply is within the target range.

Mr. Wyn Roberts: asked the Chancellor of the Exchequer what is the current rate of growth of the money supply.

Mr. Healey: In the month to mid-January, the sterling M3 measure of money supply grew by about 2¼ per cent. This high figure can be accounted for largely by the once-and-for-all effects of the tax refunds resulting from the reliefs which I announced in October. The underlying trend rate of growth is, therefore, well below this. I am confident that the next few months will show that trend to be within the desired range.

Mr. Ridley: If the further figures to be published show that the growth in the money supply is still above target, will it be the Chancellor's priority to proceed with his tax cuts in the Budget, or will he turn his priority to reducing the growth in the money supply?

Mr. Healey: The hon. Member knows that fluctuations in the money supply from month to month, or even over a period of more than one month, are perfectly consistent with keeping the monetary aggregates under control. In Germany, which is always held up by the hon. Member as a model to be followed by this

country, the increase in money supply over the last three months has been at an annual rate of 15·5 per cent., nearly double the amount provided for a year ago. Yet the Bundesbank has quite rightly decided to maintain an 8 per cent. target for the increase in money supply for the coming year. We propose to follow the type of flexibility which has been successfully followed in Germany. I am glad to see that the reaction in the markets to the figures published last week has been a great deal more sensible than that of Conservative Members.

Sir G. Howe: Does the Chancellor of the Exchequer recognise, and can he confirm quite clearly, the need for next year's monetary targets to be set at significantly lower levels than have prevailed this year?

Mr. Healey: I shall give the House my views on next year's monetary targets—[HON. MEMBERS: "Answer."] I have not the slightest intention of answering the question now. Instead, I refer the right hon. and learned Gentleman to the fact that Germany has consistently overshot its announced monetary targets without the consequences that the Opposition would expect. Ever since those targets were introduced they have been overshot year by year. The German Government, however, have sensibly set their monetary targets so as to leave genuine scope for growth without reigniting inflation. We propose to follow that example, and I suggest that the right hon. and learned Gentleman would make a more useful contribution to this debate if he studied the experience of countries the Governments of which, unlike his Government, have maintained a sensible and flexible control of monetary aggregates.

Mr. Stoddart: Bearing in mind that when the last Conservative Administration was in office the money supply was rising at an annual rate of 28 per cent., does my right hon. Friend not think that the Opposition are displaying sheer effrontery to raise the matter, let alone anything else?

Mr. Healey: For the last four years, having listened to the Opposition, we have become quite used to the spectacle of Satan rebuking sin.

Oral Answers to Questions — PRIME MINISTER (ENGAGEMENTS)

Mr. Radice: asked the Prime Minister if he will list his engagements for 23rd February.

The Prime Minister (Mr. James Callaghan): This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others.

Mr. Radice: Will my right hon. Friend confirm that in view of the continuing recession in world trade there is now an increasing danger of a slide into beggar-my-neighbour protectionism? Does he agree that a major new initiative to expand world demand is now urgently needed?

The Prime Minister: I have made clear the Government's view on this matter on a number of occasions. Over the last 12 months Britain has solved a number of its own problems and can look forward to a better year in a number of ways. However, the world situation has been deteriorating while ours has been improving. The result is—and this concerns especially unemployment—that the upturn that we were hoping for in world trade, which would help our exports and, therefore, jobs, is not coming. I am constantly in touch with a number of overseas leaders about this, to encourage a faster rate of growth in the world.

Mrs. Thatcher: Will the Prime Minister find time today to consider the effect of his Government's policies, which have reduced the take-home pay of the average worker by £7 a week while providing payments of up to £10,000 to some of those at Swan Hunter who have refused the jobs that were offered to them? Does he think that this is a sensible use of scarce resources?

The Prime Minister: I notice that the right hon. Lady, as always, is against anything which helps to create or keep jobs. The truth is—I am astonished at her effrontery—that if her policies were carried through, according to my estimate, at least 1 million jobs would go in the very near future.

Mrs. Thatcher: The Prime Minister has either unwittingly or deliberately

refused to answer the question, which related to redundancy payments to those who have refused jobs. Does the right hon. Gentleman think it better that those who work hard should have a more raw deal than those who refuse to work?

The Prime Minister: That is a series of totally irrelevant questions—the kind of pious platitude to which we are becoming accustomed from the right hon. Lady. It is totally meaningless, full of froth, and with a kind of spurious gentility that we have come to associate with her.

Mr. Ashton: Will my right hon. Friend find time today to look at Tuesday's newspaper reports in which the right hon. Lady said that she had been unfairly treated over her statments on immigration? Does my right hon. Friend feel that he should have some sympathy with her because, since 1959, her majority at Finchley has dropped from 16,000 to 3,900, and last year in the Greater London Council elections the National Front won more votes in Finchley than it did in Paddington, Vauxhall or Lambeth?

The Prime Minister: I read that the right hon. Lady said that she was not going to be bullied or intimidated about these matters.

Mrs. Thatcher: Hear, hear.

The Prime Minister: The role of shrinking violet is not one that I would really associate with her. On the general proposition, I feel there is no need to have any real sympathy for the right hon. Lady. The Government side of the House is attacked consistently by that house organ of the Tory Party, the Daily Mail. The only difference between us and the right hon. Lady is that we do not whine when we are attacked.

Mr. Anthony Grant: Will the Prime Minister find time today to compliment the Metropolitan Police Commisisoner on his wise decision to ban the National Front march, therfore ensuring that liberty for the many is not fouled up by licence for the few?

The Prime Minister: The decision was taken, as the hon. Gentleman says, by the Commissioner. It is supported by my right hon. Friend the Home Secretary, in his capacity as Home Secretary. I regret the need for the decision, but I am certain that it was right and I agree with


the hon. Gentleman. I hope that calm will soon return to our streets, so that lawful processions can be held without the risk of violence, but I fear that that will take some time. In the meantime, I am certain—I know that the Commissioner and others share this view—that our streets must be kept safe for innocent passers-by and users to walk through without danger from hooligans or any others who want to upset the peace.

Mr. Temple-Morris: asked the Prime Minister if he will list his engagements for Thursday 23rd February 1978.

The Prime Minister: I refer the hon. Member to the reply which I have just given to my hon. Friend the Member for Chester-le-Street (Mr. Radice).

Mr. Temple-Morris: The Prime Minister will appreciate the grave implications of the Rhodesian problem. I ask him a straight question. If the internal settlement, based upon one man, one vote, becomes successful—and there is every indication that it will—will the Government end their indecision and give a lead to the international community in backing that settlement?

The Prime Minister: I appreciate the way in which the hon. Gentleman puts the point. We have always taken the view that a successful precondition was one man, one vote, in Rhodesia. Therefore, clearly any settlement based genuinely on that would be welcome to Her Majesty's Government. However, in addition to that, and in the light of developments since the Six Principles were first laid down, we have now outside Rhodesia large armed guerrilla forces—patriotic forces, as they are called—under the control of experienced leaders of Rhodesian Africans.
If there is to be a final settlement in Zimbabwe, I think that everybody—Bishop Muzorewa, the Rev. N. Sithole and any other leader in Rhodesia, such as Mr. Smith—should endeavour to be involved in the settlement. That will be the best way for an independent Zimbabwe to go forward. I do not believe that Mr. Nkomo or Mr. Mugabe can claim sole rights. They must take their place—they must be allowed to take their place—and fight any election that is conducted on the basis of one man, one vote. They can expect no more than that, but no less.

Mr. James Lamond: Has my right hon. Friend had the opportunity today to reconsider the answers that he gave on Tuesday to questions about disarmament and the neutron bomb, when he appeared to depart slightly from his normal constructive role in international affairs and to be somewhat at variance with the Secretary of State for Defence, who understood that those of us who are anxious about the neutron bomb do not say that its explosive power is greater than any existing weapon but that because it can be used in a limited area it reduces the threshold of nuclear war?

The Prime Minister: I dispute that. It seems that as long as the use of this weapon—I read the editorials this morning about the matter—remains under the control of Ministers, as this weapon would if it were ever developed, which it has not yet been, the threshold of nuclear war would not be lowered. It would still require a political decision before it could be used. That is an essential safeguard, and the correct safeguard. My hope is—I thought that I was being very constructive on Tuesday—that we can enter into negotiations in a genuine way on some of the dreadful weapons that are being developed, to try to reduce the threat to the world.

Mr. Emery: Following the Prime Minister's studied insults to my right hon. Friend the Leader of the Opposition, will he realise that insult is no answer to fact? Will he please answer a straight question? Do his Government consider that it is important to give very large redundancy payments to those who are redundant because they refuse to work when contracts are available to them?

The Prime Minister: I promise the hon. Gentleman that my insults were not studied. They would have been far better than that if they had been. I came here in perfect good humour. I stand here in all innocence, and I am basely attacked from the moment that I get to the Dispatch Box.
The redundancy Acts are clear on the compensation that should be paid, and the Acts must be carried out. I repeat what I have often said to the right hon. Lady the Leader of the Opposition. If she has these questions lying so close to her heart, why does she not adopt the proper course for the Leader of the


Opposition and table a Question to me, as she is entitled to do, to which she will get a considered answer?

Oral Answers to Questions — RED SEA COUNTRIES

Mr. Ridley: asked the Prime Minister if he intends to visit the countries bordering the Red Sea.

The Prime Minister: No.

Mr. Ridley: Is the Prime Minister aware that if he visited the Red Sea he would have the opportunity to consider that Moses did not lead his people to the Promised Land but only into the desert? Is the right hon. Gentleman aware that the desert into which he has led us is that of stagnant production and falling living standards? How does he explain away the disastrous results of his economic and industrial strategy when the Germans, who did not have North Sea oil but did have the same oil crisis, have succeeded in having growth where we have stagnation?

The Prime Minister: No.

Mr. MacFarquhar: If I may bring the matter rather closer to the Red Sea, has my right hon. Friend had any consultations with the American President since he described Soviet activities in the Horn of Africa a few Question Times ago as "adventurism"?

The Prime Minister: No, I have had no more contact with the President about this matter, although my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs is in constant contact on it with his fellow Foreign Ministers.

Mr. Baker: On his journey to the Red Sea, if he goes on it, will the Prime Minister consider whether it is wise for the Labour Party to spend £50,000 on a series of straw polls to determine the views of the British people? Does he not think that he would get rather better value for money if instead of spending £50,000 on a straw poll he had the courage to have a real poll?

The Prime Minister: There will be a General Election in due course. The hon. Gentleman, however, need not get too nervous yet. His seat is safe for a little while.

Mr. Flannery: If my right hon. Friend is going to the Red Sea, will he think for a while that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is possibly the only Member of the House who can actually strut while sitting?

The Prime Minister: I have always had some understanding for the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) since he was dismissed by the previous Administration. However, I felt that it was, in the words of John Dryden, a case of
Better one suffer, than a nation grieve.

Mr. Maurice Macmillan: Reverting to the Red Sea, will the Prime Minister consider most carefully the increasing Soviet influence on both coasts of the Red Sea and the precariousness or otherwise of the position of the present Administration in Saudi Arabia, and consult his colleagues in Europe and within the North Atlantic Alliance to ascertain what can be done to put the matter right?

The Prime Minister: Yes. This is a serious problem, which constantly engages the attention of a number of countries. Indeed, President Barre of Somalia and others have attempted to get some help on this, and it has been provided. Although we would be happy to go to the United Nations Security Council, we must be careful about what steps should be taken, in case we make the situation worse rather than better. However, there is a serious problem. I can only say that it is not capable of easy solution, but we are aware of the grave risks involved.

BUSINESS OF THE HOUSE

Mrs. Thatcher: May I ask the Lord President to state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 27TH FEBRUARY—Supply [10th Allotted Day]: There will be debate on law and order, which will arise on a motion on the Secretary of State's salary.
Motion on EEC Documents R/2962 and R/2963 of 1976 on Jurisdiction and Judgments convention.
TUESDAY 28TH FEBRUARY—Remaining stages of the Housing (Financial Provisions) (Scotland) Bill and of the Civil Aviation Bill.
WEDNESDAY 1ST MARCH, St. David's Day, and THURSDAY 2ND MARCH—Progress in Committee on the Wales Bill.
FRIDAY 3RD MARCH—Private Members' motions.
MONDAY 6TH MARCH—Northern Ire-land business.

Mrs. Thatcher: I should like to ask the Lord President two questions. As, since he arranged the business, the report of the Select Committee on steel forecasts has been published, and has come to the clear conclusion that the Government should find time for a two-day debate at the earliest moment, and in any event before the Secretary of State's expected statement in March, will he rearrange the business for next week to make time for that debate, which is of almost equal importance to Wales, if not more so, than the business that he has announced?
Secondly, will he also provide time to debate the report of the Speaker's Conference on the recommendations regarding representation in Northern Ireland?

Mr. Foot: I think that we should look at and study the reports on those two matters before making any proposals for a debate.

Mr. Douglas-Mann: Will the Lord President be facilitating the passage of the Wales Bill by bringing forward amendments similar to those which have been carried by the House on the Scotland Bill regarding the referendum?

Mr. Foot: My hon. Friend must wait and see when we arrive at that stage in the proceedings.

Mr. Peter Walker: In view of the remarks made by the Prime Minister earlier in the week, will the Lord President now confirm that the House will debate the report of the Windscale inquiry before the decision is taken?

Mr. Foot: My right hon. Friend made a statement and I made a statement in response to a question by the right hon. Gentleman a week or two ago. Certainly we are taking into account the representa-

tions that both he and my hon. Friend the Member for Pontypool (Mr. Abse) have made. We are seeking the best way for the House to be accommodated with regard to that matter.

Mr. Stoddart: When may we expect the electricity industry reorganisation Bill to be introduced?

Mr. Foot: Not yet. There are still some difficulties with that Bill, and I cannot make a statement to the House about it.

Mr. Michael Morris: Why is the Lord President reluctant to have a debate on the construction industry—a debate which has been sought by both sides of the House—when it would give the Government an opportunity to explain their nationalisation proposals?

Mr. Foot: We are not reluctant to have a debate on that matter. The Opposition could have chosen that subject for debate instead of one of the other subjects that they have chosen over the last few weeks.

Mr. Spearing: Will my right hon. Friend confirm that the documents for discussion on Monday evening, R/2962 and R/2963, concerning reciprocal enforcement of judgments, will mean that judgments on domestic, business and insurance matters in EEC courts will be enforceable in British courts without further hearings?

Mr. Foot: That is a matter for discussion when the debate takes place. I have no doubt that my hon. Friend will raise the matter and will have a response from the Minister in charge.

Mr. Stokes: Will the Lord President find time to debate Early-Day Motion No. 244, in my name and the names of other hon. Members, regarding the forcible repatriation of unfortunate people to the Soviet Union? Despite what the Foreign Secretary said yesterday, does the right hon. Gentleman not agree that this is a matter of public concern which touches the honour of this country?

[That this House condemns the action of Her Majesty's Government in 1947 in forcibly repatriating 185 Russian men, women and children; deplores the misleading information given to the House at that time by the Under-Secretary of State for Foreign Affairs; and calls for an


inquiry into this and many other similar episodes, which are a blot on British history.]

Mr. Foot: I have nothing to add to what was said by the Foreign Secretary on that subject yesterday. Therefore, I cannot promise a debate on the matter.

Mr. Palmer: Does my right hon. Friend agree that the difficulty about the introduction of the electricity industry reorganisation Bill is the opposition by the Liberal Party? Does he see any early hope of overcoming that opposition?

Mr. Foot: I am always eager to engage in processes of persuasion with the Liberal Party. I should be grateful for anything that my hon. Friend can do to assist me in that direction. The Government's proposal about the electricity industry as a whole is most important and we certainly wish to see it in operation.

Mr. Montgomery: Will the Leader of the House find time for a debate on the Public Order Act? In view of the ban on Saturday's march, there are now tales that the National Front and the Anti-Nazi League are to have a mass canvass in Ilford on Saturday and there are threats of possible violence which would be very difficult for the police to contain.

Mr. Foot: I understand the importance of the subject and the interest in the House about the operation of the Public Order Act, but I do not believe that a debate at such a time would necessarily assist. It is, of course, a subject which can be selected for debate.

Mr. Faulds: Following the debate the other evening on secretaries' conditions of employment and remuneration, what action does my right hon. Friend intend to take on the specific question of severance pay?

Mr. Foot: I gave undertakings to the House in that debate. I am carrying out the undertakings that I gave at the end of those proceedings.

Mr. Rost: As the electricity industry reorganisation Bill has been circulated to certain privileged parties in the House, is it not about time that it was published? Why the delay?

Mr. Foot: The Bill has not been circulated to privileged persons. The Bill, in the final form in which it may be presented to the House, has not yet been produced.

Mr. Arthur Lewis: As the Lord President has limited the time for debate, will he next week arrange for the appropriate Minister to make a statement on the Government's intentions regarding the statement by the President of the European Commission that between now and 1985 the present 6½ million unemployed in Europe will increase to 15½ million? That is a very serious matter. Surely the Government ought now to come forward and deny it, answer it, or say what they propose to do about it.

Mr. Foot: The general subject of unemployment in the Western world is extremely important. Indeed, in some respects it is the most important industrial question facing the whole of the Western world. There must be continual debates in this House on this matter from different points of view. However, it is a question not only of one statement by a Commission or anybody else but of seeking every possible means of fighting unemployment.

Mr. Luce: The Leader of the House will recall that last week my right hon. Friend the Leader of the Opposition asked that the Minister of State for Overseas Development should make a statement as soon as possible about the Government's decision to spend an extra £90 million of taxpayers' money on the Crown Agents. In view of the great anxiety about not only the provision of this money but the delay in introducing a motion with regard to establishing a tribunal of inquiry, will he ensure that a statement is made?

Mr. Foot: I thought that my right hon. Friend had been in touch with the hon. Gentleman on this subject. I had hoped that that discussion would have made one part of the matter unnecessary. If not, I shall look at it afresh and consider whether a statement should be made.
I hope that it will be possible to make an announcement about the tribunal of inquiry next week.

Several hon. Members: rose—

Mr. Speaker: Mr. Mendelson.

Mr. Mendelson: The question that I intended to ask is not necessary in view of the last reply.

Mr. Ioan Evans: Will my right hon. Friend look at the constructive suggestion made by my hon. Friend the Member for Mitcham and Mordern (Mr. Douglas-Mann)? Would it not make for better discussion of the Wales Bill if we had an indication from the Government about the amendments that they will accept? On Wednesday we shall be on Clause 1, which is similar to the clause which was deleted from the Scotland Bill and which the Government have no intention of putting back. Would it not help the House to use the time on the Wales Bill to better effect?

Mr. Foot: My hon. Friend and the rest of the House must be aware that it would lead to hopeless confusion in the conduct of any business if I announced at business questions what the Government's attitude was towards various clauses in a Bill. The most satisfactory way of dealing with these matters is to leave it until the Bill is before the House. That is the normal procedure and it is one which we shall follow.

Mr. Temple-Morris: Bearing in mind the considerable concern in the House and outside about the passage of the Protection of Children Bill, has not the House an entitlement to an indication from the Leader of the House about when the Bill is expected to go to Committee?

Mr. Foot: It is not normal for announcements to be made during business questions about the position of Private Members' Bills. I indicated to the sponsor of the Bill that I should be prepared to look at the situation and to have some discussions with him. I have discussed it with him. It is not proper for me to make an announcement from the Dispatch Box about a Private Member's Bill in the way which I have been invited to adopt.

Mr. Loyden: Does my right hon. Friend agree that it is nothing less than a scandal that 3,000 jobs are in jeopardy on Merseyside because of a decision made by Leyland, particularly when the House has not been given the opportunity to debate the Leyland situation?

Mr. Foot: I fully understand my hon. Friend's strong feelings on this subject.

He has raised the matter on a number of occasions. He is bound to press me strongly on this subject, and I fully under stand why. My right hon. Friend hopes soon to receive the report and recommendations from the National Enterprise Board. He will then make a statement which will provide an opportunity for discussion. In the meantime, I have no doubt that my hon. Friend will make his own representations to the Department on behalf of his constituents.

Mr. Michael Marshall: Does the Leader of the House appreciate that the report of the Select Committee on Nationalised Industries on the steel industry, which is out today, has been produced within one month by an almost superhuman effort in order to allow the House to debate all three reports on the state of the steel industry? Can the Leader of the House therefore commit himself to providing time for a debate before the statement in March?

Mr. Foot: The normal method of dealing with these reports is for them to be studied by the Government and for the Government then to make their comments on the report. That is the right way to proceed. It would be absurd to have a debate in which the Government did not declare their views. I hope that the House will wait to deal with the matter in the proper way.

Mr. Skinner: Will my right hon. Friend ensure that there will be a statement or a debate on the need to obtain markets for the coal industry, because there are 30 million tons of coal on the ground and more is being turned out? Is my right hon. Friend aware that in Northern Ireland it is suggested that the large domestic market for coal there is under consideration with a view to using other fuels? Will he arrange for a statement or a debate?

Mr. Foot: I cannot promise an immediate debate. I have as great an interest in the welfare of the coal industry as my hon. Friend the Member for Bolsover (Mr. Skinner). This Government have undertaken a series of measures to assist in that direction. I shall discuss the matter with the Secretary of State for Energy to see what next course should be taken.

Mr. du Cann: I do not wish to press the Leader of the House today but will


he consider making an early statement about Members' pensions? This is a matter which has exercised hon. Members on both sides. We all hope that he will be able to say something soon about the implementation of the Boyle Report.

Mr. Foot: I shall seek to make a statement soon. I and the Government are doing everything in our power to try to bring forward this matter. It is urgent. We want the co-operation of the House in dealing with it. We are going about it in a manner that will ensure that we have that co-operation.

Mr. Litterick: Can my right hon. Friend indicate whether time will be made available to allow the House to consider the reform of the Official Secrets Act, under which three journalists, Aubrey, Berry and Campbell, are being indicted?

Mr. Foot: The Government have promised to produce a White Paper on the subject. That White Paper will be published in the reasonably near future. No doubt comments will be made about how we should proceed after that.

Mr. Kershaw: Is it the intention of the Leader of the House to introduce a Bill to deal with Members' pensions? If so, will it be introduced in this Session?

Mr. Foot: The matter will be dealt with in a Bill. It is our desire to deal with it this Session. We are seeking to command general support throughout the House.

Mrs. Renée Short: Does my right hon. Friend recall Early-Day Motion No. 218, an all-party motion signed by over 100 Members from all parts of the House? Does he recall that it drew attention to the libel case brought by the British Pregnancy Advisory Service, against the authors of "Babies for Burning", Litchfield and Kentish? It also drew attention to the attempts to persuade the General Medical Council to investigate doctors whom the authors accused of illegal practices. Is my right hon. Friend aware that since the motion was tabled it has been brought to my attention that Litchfield has denied that he lied when he gave evidence to the Select Committee—

Mr. Speaker: Order. The hon. Lady must ask a question about future business.

It sounds as if she should raise this issue on another occasion.

Mrs. Short: I am coming to the question. I also understand—[Interruption.] Hon. Members should have patience. This is a serious matter.

Mr. Speaker: Order. I know that this is a serious matter, but the hon. Lady must relate it to the business of the House in the near future.

Mrs. Short: Since it is clear that the House has been misled and that a Select Committee was misled by these two who gave evidence to it, can my right hon. Friend consider a means of dealing with it? The key to the matter is the tapes which were presented to the Select Committee but which were never transcribed. This should be done.

[That this House welcomes the unreserved retraction and apology for all 'their accusations against the British Pregnancy Advisory Service, by Michael Litchfield and Susan Kentish known as Litchfield in their book 'Babies for Burning', which was circulated to all Members of Parliament before the Second Reading of the honourable Member for Glasgow, Pollok's, Bill to amend the Abortion Act 1967; also notes that there have now been two apologies and one finding of libel following actions in the High Court against these two; further notes that two doctors falsely accused in the book and reported by the authors to the General Medical Council as being guilty of serious professional misconduct were fully investigated by the General Medical Council who decided there was no case to answer; also notes that all the allegations contained in the book of criminal activities by doctors and others and investigated by the Director of Public Prosecutions were found to con-win no evidence on which he could prosecute; therefore notes that most of the book 'Babies for Burning' and the claims of its authors has been completely discredited and repudiated and can never again be used in evidence against the Abortion Act 1967; and notes, however, that the same persons repeated and added to these untrue statements when giving evidence before the Select Committee considering the honourable Member's Abortion Amendment Bill.]

Mr. Foot: I certainly understand the sense of outrage expressed by my hon.


Friend the Member for Wolverhampton, North-East (Mrs. Short) in the motion. I do not believe that a reference of this matter to the Committee of Privileges would be a proper way of dealing with it, nor do I believe that we can deal with it by question and answer in the House. I am sure that full account will be taken of the motion, but I do not believe that such matters can be tried in the House.

Several Hon. Members: rose—

Mr. Speaker: I shall call the four hon. Members who have been attempting to catch my eye since the beginning of busines questions. Now five hon. Members appear to be standing, seeking to catch my eye.

Mr. Adley: Is the Leader of the House aware that ever since the publication of the book "The Pencourt File" there remain unrefuted serious allegations about the Secretary of State for Social Services, particularly about a visit to the BBC to try to prevent it from proceeding with a programme? This is a serious matter. Will the right hon. Gentleman invite his right hon. Friend to come to the House to tell us that what is in the book is wrong, if it is wrong?

Mr. Foot: If Ministers had to come to the House and refute everything wrong that was published about them in newspapers and books, they would have a full-time job. I have not read the book, but I have read several reviews of it. Most of them do not encourage me to read the book.

Mr. Michael Latham: May we have an early debate on the operation of the Community Land Act, which is fast becoming a totally bureaucratic shambles? In particular, the amount of circulars coming from the Government is three times the amount of land coming from the Act.

Mr. Foot: I do not accept the hon. Gentleman's information or his arithmetic.

Mr. MacKay: Is the right hon. Gentleman aware that many hon. Members on both sides of the House will be disappointed by his reply to my hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes)? Bearing that in mind, will the right hon. Gentleman ask

the Foreign Secretary to come to the House next week and make a statement about the very serious events that happened in 1947 and the very considerable blot on our history when 158 or more Russians where forcibly repatriated to the Soviet Union, where they met a tragic end?

Mr. Foot: I shall not comment on those events in my reply. My right hon. Friend the Foreign Secretary replied to this question earlier in the week, and I have nothing further to add.

Mr. Gow: Since the recommendations of the Speaker's Conference, to which the Lord President himself gave evidence, were predictable and predicted, and since those recommendations are simple and straightforward, when may we expect a statement from the Government about their view on the recommendations and a statement about a Bill to give effect to them?

Mr. Foot: I cannot give any timetable to the hon. Gentleman now. Of course, the Government will consider the report that we have received this week from the Speaker's Conference. That is the next stage.

Mr. Stanbrook: When are we to have the debate on immigration which so many Labour Members claim they wish to have?

Mr. Foot: I am sure that the hon. Gentleman is so eager that he must have pressed this matter on his own Front Bench, but so far it does not seem that that has had much result.

WEST COUNTRY AND WALES (SNOW STORM)

The Minister of State, Department of the Environment (Mr. Denis Howell): With permission, Mr. Speaker, I should like to make a statement upon the emergency situation in the West Country caused by an average of 18 inches of snow which fell last weekend, causing drifts of up to 30 feet and completely blocking communications over a wide area.
The local authorities immediately established emergency operational centres to co-ordinate the efforts of the agencies. I cannot speak to highly of the work of


all the services, both public and voluntary. The magnitude of their task can be judged by the fact that some 25,000 houses were without electricity, 100,000 premises were without water, telephone services to 10,000 subscribers were disrupted, and almost all road and rail lines were severed.
On behalf of the Government, I established three priorities: maximum help for people at risk, such as the elderly, the sick and the isolated; to ensure essential supplies of food, water, fuel and feeding stuffs for farm livestock; the restoration of all communications.
As the House would expect, the Armed Services mobilised their resources with first-class efficiency and met every call made upon them. In particular, helicopters provided an emergency ambulance service and transported essential workers to restore vital services.
The Ministry of Agriculture established separate operational centres and received over 200 calls from farmers specifically requesting help in feeding livestock, apart from many more seeking advice on emergency problems. As soon as the fog lifted, 28 helicopters operated this special relief service and are still continuing these duties.
The House will be interested to learn that just one farm in North Devon received 45 tons of feedingstuff yesterday to sustain 400,000 chickens, 2,000 pigs and 200 dairy cattle, and will continue to receive 20 tons per day whilst the emergency lasts.
The House will wish to know the up-to-date position in the West Country at noon today. Electricity supplies have been restored to all but 1,500 homes. One thousand homes are still without piped supplies of water. Telephone services are returning slowly to normal, but this work has been delayed by the flooding of underground cables, and some 8,000 subscribers are still without service.
All rail passenger services have been restored and most of the major trunk roads are now open except for the north-south routes through Dorset. Snow clearing work is proceeding rapidly.
The flood warning system is fully operation and is coping well with the present rate of thaw.
In Wales the situation continues to improve as the thaw progresses. There

were two successful airlifts yesterday of fodder and plastic milk containers. There has been one request so far today for a fodder airlift which is being considered. Milk collection difficulties are now confined to a few areas only. A general thaw and heavy rain during the night have helped to clear the roads and only a few villages in the Vale of Glamorgan and South Pembrokeshire remain inaccessible.
As the House will know, my right hon. Friend the Minister of Agriculture made an immediate announcement that, subject to the approval of Parliament, the cost of this airlift will be met by central Government funds. I have also advised my right hon. Friend that the nature of the losses to farmers appears to fall into three categories: the death of animals, the destruction of buildings, and loss of income, particularly from milk. It is far too early for the farming community to calculate those costs but my right hon. Friend is already considering the implications.
So far as local authority emergency expenditure is concerned, I can confirm the statement made by my right hon. Friend the Secretary of State for the Environment on 8th February, in respect of the floods and gales of last November and January, that the Government will pay 75 per cent. of all such emergency expenditure in excess of a penny rate.
Finally, the people of the West Country and Wales have good cause to be grateful to the entire work force engaged in this operation—local authority road men, electricity, water, telephone and transport workers, doctors, Health Service and social service personnel, public servants of both central and local government doing the less spectacular but vital organisational work, and, most important, the Service men and police. Everyone did a wonderful job, sometimes working nonstop around the clock for two or three days. I know that the whole House will wish to join in that tribute to them.

Mr. Alison: I am sure that the right hon. Gentleman recognises that the whole country and hon. Members in every part of the House have felt deeply involved and deeply concerned and shocked about the blizzard disaster that hit the West Country and Wales, which he has just described very graphically. May I, on behalf of my right hon. and hon.


Friends, echo the expressions of admiration and appreciation that the right hon. Gentleman has expressed for the work of all those concerned, not least the Armed Services but also local authorities and those in the local voluntary organisations for the marvellous job that they have done?
I should like to ask the Minister a couple of questions. First, will he promise the House that the local authorities concerned will know within one week of today exactly what is meant by the promise to pay 75 per cent. of all emergency expenditure in excess of a penny rate? I stress the words "within one week of today" because the Minister will be aware that after the East Anglian flooding, which took place as long as six weeks ago on 11th January, the local authorities there still do not know exactly what the phrase means, have not been able to pay out one penny, and do not know what the Government will be giving them. The Minister must make the same sort of lightning visitation to the bureaucracy in this context as he made to the West Country. They must have information within one week.
Secondly, will the Minister guarantee that loss that might have been covered by insurance but was not covered will not be excluded from the Government's emergency relief? The less affluent sections of the community are usually those who are not insured or who fail to negotiate proper insurance, and the scale of the disaster is outside the normal range of insurable risks. Therefore, may we have a categorical assurance that uninsured private losses—although they could have been insured—will qualify for Government relief?

Mr. Howell: First, I thank the hon. Gentleman for joining in the tributes. I know that the fact that they have been made to all those concerned, to the local authorities and all the work people, and the fact that the tributes are supported on all sides of the House, will make them fully appreciated.
As for the hon. Gentleman's two questions, I can say now that the undertaking we have given about local authority expenditure means what it says. There is no need to wait for one week. I assume

that the hon. Gentleman was referring to something said yesterday by the Association of District Councils to the effect that there is bureaucracy. I am able categorically to deny that. There are no foundations at all for the statement made yesterday by that organisation.
No claims have so far been received in respect of flood and gale damage. We have had a number of estimates, and as soon as the claims come in, we shall meet them. The only point on which we have to be satisfied is that the work has been done as a result of flood damage, or in this case as a result of the blizzard during the weekend. I hope that that clears up any uncertainty which might exist.
The question about insurance does not, I think, apply to local authority expenditure but it applies, possibly, to farmers. My right hon. Friend will take note of what is said. I am bound to say that it might cause very considerable difficulties if some people have insured their property and their livestock and others have not, but I am sure that my right hon. Friend will deal with this as sympathetically as he can.

Mr. Ioan Evans: I thank my hon. Friend and the Under-Secretary of State for Wales for the prompt way in which the Government have reacted to this serious crisis. In view of the fact that this has been the most serious snowfall for 30 years and has serious financial implications for local authorities, may we take it that the assistance to be given to those in the West Country, 75 per cent. above a 1p rate, will apply also to Wales and to the Mid-Glamorgan authority, which took on unemployed people to help in clearance work, something which might be considered in other affected areas?

Mr. Howell: I can confirm to my hon. Friend that these arrangements apply to Wales. Certainly, if the Mid-Glamorgan authority engaged the unemployed to help in clearance work, that was a very commendable action on its part which will rate for consideration.

Mr. Emery: Does the Minister realise that certain hon. Members have been trying to draw to the attention of the House aspects of this emergency, over which there has been concern for the last three days? Would he allow me to pay tribute to two categories he did not mention?


First, the railwaymen; I know of one instance where a signalman was working on his own for 27 hours keeping the line open and keeping the points from freezing. The second category is the farmers who, often jointly with next door neighbours, were acting as ambulance drivers getting old people to hospital.
May I ask the Minister three direct questions? Who was the Minister meant to be responsible for co-ordination in such an emergency before the Minister of State was appointed? If the Government considered that the emergency procedure was adequate, why was there a mix-up on the funding for helicopters until the Minister himself got to Devon on the Monday? Secondly, why is there not in existence, or in use, an emergency code of perhaps three or four symbols which could be used by people who are cut off and have no telephone, so that either in the snow or on a blanket they can signify to helicopters their medical requirements and their requirements in food, and animal feed?
Lastly, on the matter of funding, would the Minister consider and have other Departments considered whether the Government should not structure a permanent relief fund with an annual Supply Vote so that whenever there are emergencies of this kind—and they crop up at least every other year, if not every year—money is immediately available to cope with the major problems that arise?

Mr. Howell: I am grateful to the hon. Gentleman for specifically drawing attention to the part played by the railwaymen and ambulance men, and by the firemen, whom I would have hoped to include in my general all-purpose appreciation. On the funding of helicopter flights, local authorities, after establishing their own emergency centres, telephoned the Forces movement centre areas requesting a supply of Forces' helicopters and they were given the normal going rate that would apply for non-essential work. As soon as I realised that that had happened, I gave instructions that all such work was to be carried out and the cost borne by public funds.
On the question of permanent relief, the hon. Gentleman and the areas will be interested to know that the Home Office issued a circular on 2nd September 1975 containing 48 paragraphs of detailed advice on the subject of major accidents

and natural disasters; and many local authorities naturally turned to that immediately to consider what arrangements were appropriate to them in the crisis. I do not think that a permanent fund would be suitable since the scale of these disasters varies enormously, having regard to the scale of damage. These are matters for which the cost should be borne by some central Government fund as and when required.

Mr. R. C. Mitchell: Is the Minister aware that the EEC Commission has a permanent disaster fund and contributed £651,000 in respect of flood damage in South-East England and £325,000 for snow damage in Scotland? Does the Minister expect that we should get some contribution from that fund for the South West?

Mr. Howell: It is the case that the EEC Commission offered early help in respect of the cost of the East Coast flood disaster without being approached by the Government, and no doubt the Commission will take account of the situation on this occasion.

Mr. du Cann: The Minister is quite right. Many people have done wonderful work in the West Country in recent days in appalling circumstances. But will he accept the thanks of those of us who watched his own efforts in the West Country for his promptness and effectiveness in taking action? Is he aware, however, that the emergency is by no means over? Most of the roads in my constituency still will not be cleared for another 36 hours. This is not an emergency, to use his word, but a catastrophe. Will he appreciate that Somerset has already incurred expenditure of probably over £1 million and that the proposals that he and his colleagues are making for reimbursement are not satisfactory and will not be accepted?
Would the right hon. Gentleman therefore be good enough to agree to meet, as soon as possible next week, a representative group of Members of Parliament from the South-West, and Wales if necessary, to discuss adequate provision of financial help for farmers and all those affected? Last but by no means least, the ratepayers of a county such as Somerset have already been shabbily treated by the Government of which the hon. Gentleman is a member.

Mr. Howell: I am most appreciative of the right hon. Gentleman's personal expression of appreciation for myself. On the second part of his question, I am well aware of the situation in his constituency in Somerset. I saw for myself the efforts being made there under the control of the county council and the police to ensure that everything that could be done was done, particularly on communications. I am glad to say that they have most of the main roads open. They have particular problems with Exmoor, particularly the B3188 road, but that is receiving close attention. According to a report I had this morning, a thaw is now proceeding rapidly, and this will assist their efforts, so that they should be through much more quickly than would otherwise have been the case.
Finally, on the formula, I know that whatever the Government offer will be thought by some to be inadequate. I shall certainly be happy to meet a deputation of hon. Members, but the formula that local authorities should bear the first penny rate, involves, after all, a most modest element. We make our rates in local government on the basis of a penny in the pound. Asking local authorities to bear the product of the first penny rate, after which the Government propose to bear the overwhelming share of what remains, is, I should have thought, a very reasonable basis. It is thought to be so in the West Country.

Mr. Terry Walker: Does my right hon. Friend see any need for co-ordination of emergency services in the future? Whilst I appreciate what he has said and pay tribute to the local services on what they have done, does he see problems in co-ordination between county and district authorities at very early stages of an emergency and does he consider that greater co-ordination would mean that we could start the job much earlier?

Mr. Howell: I cannot believe that the local authorities could have been much more efficient than they were on this occasion. They went into action almost immediately. I asked the same question: what is the relationship between the county councils and the district councils? The regional offices, particularly of the Department of the Environment and the Ministry of Agriculture, Fisheries and Food—and I am sure the same applies to the Welsh Office—were very soon into

action carrying out their overall co-ordinating role, particularly of getting additional machinery from the Services, and from other local authorities brought into the region as quickly as they could by the best possible route.
We shall examine the lessons of these difficulties, as we did with the floods and the drought. If there are any lessons to learn, we shall try to learn them, but I am glad to say that many of the lessons we learnt in the drought two years ago, and the priorities we established then, stood us in very good stead on this occasion.

Mr. Pardoe: Will the Minister accept that throughout the House we join him in his congratulations to those involved in the work? No praise can be too high.
What is the right hon. Gentleman's estimate of the farm damage? May we expect a statement from the Minister of Agriculture, Fisheries and Food about compensation? Is the right hon. Gentleman aware that we should not wait for an EEC contribution but should have a firm commitment from the Government on agricultural compensation immediately?
May I ask the right hon. Gentleman about the discussions he has had with my right hon. Friend the Member for Devon, North (Mr. Thorpe)—who has succumbed to the weather and is down with flu—about the possibility of the meteorological forecasts helping to solve this sort of problem, at least in giving fair warning? What investigations is the right hon. Gentleman making of the early forecasts that we receive? How does he believe that these could play their part in helping to solve the problem before we reach the present situation?

Mr. Howell: I am sorry that the right hon. Member for Devon, North (Mr. Thorpe) is down with flu, but I am glad that he communicated with me this morning by telephone. I cannot at this stage give an estimate of the damage. For example, most of the sheep on Dartmoor may well have been killed. The farmers cannot yet go out on to the moors to assess the extent of their loss. Therefore, it will take some time before agricultture can accurately inform my right hon. Friend of the position.
The Forces and the police depend on the meteorological forecasts they receive


from central points. There may well be a case for much more localised meteorological forecasts. When trying to go from Devon to Dorset by helicopter yesterday, I was told that I could not get through, on the basis of a forecast that we had. But when I had gone into Somerset I found that I could get through and I was able to change my plans and get a helicopter to take me. However, that sort of thing is inevitable in the present situation.

Mr. William Hamilton: Is my right hon. Friend aware that there was adverse comment in the Scottish Press, comparing his statements about financial aid to be given in the South-West with the financial aid given to farmers and others who suffered in Scotland? Will he give an assurance that the treatment of those who suffered in Scotland will be as generous as that of the South-West?

Mr. Howell: I cannot believe that there will be any disparity between the treatment of farmers in this country and those in Scotland. If there is any unfair comparison, I am sure that we can all rely on my hon. Friend to see that the matter is put right. I shall convey his sentiments to my right hon. Friend the Secretary of State for Scotland, who I have no doubt will be glad to reassure my hon. Friend.

Several Hon. Members: rose—

Mr. Speaker: I shall do my best to call those hon. Members whose constituencies are in the South-West or Wales and who have been rising—

Mr. Dennis Skinner: What about us?

Mr. Speaker: I was addressing one side of the House for a moment, because so many of those constituencies are represented on that side. I shall, of course, call in turn hon. Members of the Government Benches.

Mr. Tom King: Although there is a welcome improvement in the main road situation, will the Minister accept that the position is still extremely grave in many of the villages, particularly on Exmoor? Will he ensure that the slight air of complacency that the situation is now much improved in no way handicaps the Government's continuing efforts to support the wonderful work done by the local authorities?

Mr. Howell: I am grateful for what the hon. Gentleman said. I am sure that there is no complacency on the part of those dealing with the problem. Certainly I have no complacency. The efforts will go on for as long as they are required.

Mr. Arthur Lewis: I, too, join in the well-deserved tribute to my right hon. Friend and his Department, but I warn him to be careful. Next week he and the Department will be accused of wasting Government money. He will be told that he should cut Government expenditure.
Will my right hon. Friend reconsider his remarks about the funding of relief work in such disasters? Is it not time that we had a national disaster fund, on the old war damage insurance basis. Whereby everyone can contribute a nominal sum which can then be used to deal with such catastrophies fairly? So often big businesses and big farmers can easily get their needs met but the poorer people cannot. The old war damage insurance scheme was very good. Why not try to resuscitate it?

Mr. Howell: I shall convey that suggestion to my right hon. Friend the Chancellor of the Exchequer, who I think would need to consider it. I can understand the logic of it, but, so far at any rate, the Government have been able to carry their own risks in the recent national disasters.
My hon. Friend was absolutely right to say—and it was an interesting point—that when such troubles occur the first demand is for more public expenditure. The moment I stepped out of the train at Exeter I was asked for more public expenditure and assurances that the cost of everything would be met. Because the Government and my hon. Friends believe that it should be met, I was able to give an immediate assurance. I am glad to say that on this occasion the Opposition seem to be joining us.

Mr. Paul Dean: As one of those who was stuck in the snow for a time last weekend, may I thank the Government for their prompt response to the emergency and add my tribute to those in the Armed Services, the police, the local authorities and their staff and thousands of volunteers who responded so readily to the emergency?
May I put two brief questions to the Minister? First, in view of the considerable experience that the Armed Forces have had in recent weeks in fighting fires throughout the United Kingdom and blizzards in Scotland and the West Country, will the Government consider the formation of a special emergency service within the Armed Forces to ensure that the experience gained in the recent emergencies is not lost?
Secondly, will the right hon. Gentleman recognise that his answers about meeting of the cost of the operation have not been satisfactory? Will he respond to the call that has been made to meet those concerned—hon. Members, representatives of the local authorities, the National Farmers' Union and others—to consider the matter on its merits, bearing in mind that all the county councils in the South-West were very unhappy about the rate support grant announced a little time ago? It would be a very unhappy situation were the Government to base their share of the cost on a rate support grant that we felt was unfair.

Mr. Howell: I appreciate the hon. Gentleman's references to myself and most particularly to the people concerned. As for the Armed Forces, when I reached the area I found it tremendously encouraging to be able to talk, for example, to the air vice-marshal in charge of helicopters and to know that he could immediately give me assurances about the helicopter services in all three Services which he had under his control. I am sure that the same applied to the land forces that turned out. This experience must mean that the levels of co-ordination in the Armed Services are very high. I am sure that the hon. Gentleman would not wish to say anything which would seem to be critical of that situation.
As to the local authorities, if they or the hon. Gentleman would like to see me, I should be very happy, but it was generally thought previously that the formula of the local authorities carrying their own risk up to a penny rate was a reasonable one. If people wish to put forward other ideas we shall be happy to consider them. Our concern is to get the local authorities to deal with the job, in the knowledge that they can be assured that the bulk of exenditure over a penny rate will be met.

Mr. Palmer: Has my right hon. Friend made any definition of the area of disaster? Does it, for example, go to the east side of Bristol?

Mr. Howell: It goes to any place where emergency work was necessary, and the calculations of the cost of that emergency work will fall within the formula that I have announced.

Sir Frederic Bennett: As one who does not spend much time congratulating Ministers, I endorse what my right hon. Friend the Member for Taunton (Mr. du Cann) said about the Minister's own efforts in his present appointment, and more particularly as his appointment was followed almost immediately by a change in the weather, as happened on a previous occasion in his career.
Has the Minister been able to make any assessment whether the damage to the roads—the most serious and costly item from the point of view of rehabilitation—is likely to be of a permanent nature? Has the snow and ice been on the ground long enough to do permanent structural damage, as far as he knows?
Does the Minister expect that the worst is over, or does his latest assessment lead him to think that there are still serious possibilities of further damage arising from flooding as the snow melts?

Mr. Howell: No doubt one of the reasons that I have good fortune, when I go to the West Country to deal with emergencies, is that I always establish my headquarters in the constituency of the hon. Member for Torbay (Sir F. Bennett), at the Livermead House Hotel, where the services available to Ministers and other visitors alike are excellent.
I have not received reports of adverse road damage of the sort mentioned by the hon. Gentleman, but I have noted the size and weight of some of the equipment brought in by the Armed Forces, and I shall not be surprised if there were permanent damage particularly to some of the small roads over the moors.
I think that the worst is now over. We were waiting to see how the thaw was going before we could make a judgment about flooding, but the flood warning system was operational from the very first day. I am advised that at the moment it is believed that we are over the main risk.

Mr. Skinner: Will my right hon. Friend acknowledge that any money which comes from the Common Market towards these disasters will have been paid for by the British taxpayer—and more besides? We still contribute much more to the Common Market fund in total that we get out of it.
Once again we see the Tory monetarists coming to the House to plead to the Government for help. Day after day we have to listen to the Tory monetarists telling the Government to get out of people's hair and allow private enterprise to operate, but as soon as there is a disaster they are the first to come pleading for money from the Government. I tell my right hon. Friend that some of us on the Labour Benches believe that when there is sickness in the family, when people are blind or when people want help over a stile, not just on one day but every day, there is an urgent need for the Government to do a great deal more in that direction as well.

Mr. Howell: I am sure that my hon Friend feels that at any rate on this occasion we have come up to the Standards that he has set. We shall endeavour to maintain them in the future.
My hon. Friend is quite right, of course, in what he says about the EEC funds. I am bound to say that all help from public funds has to be paid for by the taxpayers in the end.

Several Hon. Members: rose—

Mr. Speaker: Order. Five hon. Members are on their feet. I hope that hon Members will be brief. Mr. Hicks.

Mr. Hicks: Will the Minister confirm that his Department has already made application to the EEC Commission in Brussels for additional funds, under the terms of the Community's emergency fund, in order to help meet the additional requirement of the South-West?

Mr. Howell: The fund already exists and therefore it is not necessary for us to make an application. In any case, it would be quite ludicrous to make an application this early, before we know the extent of the damage.

Miss Fookes: When does the Minister expect the telephone service to be fully restored to normal operation? This is very important in remote areas.
Will voluntary organisation receive any compensation for the extra work in which they have been involved? I am thinking particularly of the Royal Society for the Prevention of Cruelty to Animals, which has done a great deal to help farmers and is continuing to do so.

Mr. Howell: I am obliged to the hon. Lady for her point about the telephone service. I am sorry that I am unable to be more specific, but the restoration of facilities depends upon the extent of the underground flooding. As soon as these flooded areas can be pumped dry, the repair men can get down to deal with the telephone lines. I hope that will be the case by the weekend, but I cannot give any guarantees.
I am much obliged to the hon. Lady for her point about the voluntary services, because they have worked extremely well and co-operated with the statutory bodies. It would be right for their expenditure to be included in the local authority claims to Government, but I shall look specifically into that to ensure that we shall help if it is possible to do so.

Mr. Hannam: Will the Minister look further into the question of EEC aid? I understand that usually applications have to be made to the EEC from the various organisations and local authorities. Will the Minister advise them how best to apply for financial assistance?

Mr. Howell: As I have already explained, an application does not have to be made to the EEC. On the last occasion the EEC took the matter within its compass and offered a grant. One assumes that the EEC will do the same on this occasion. If not, the Government will take up the matter.

Mr. Boscawen: I endorse everything that has been said already about the public services, especially in East Somerset, where they behaved magnificently. Will the Minister agree that the ordinary people in the South-West showed extraordinary calm and a very stolid attitude during this surprising event, which has not been experienced in such severity in anyone's lifetime in the area?
Will the Minister acknowledge that when these disasters happen and large numbers of people are cut off, they need, more than anything else, information about what is going on? Usually this


can be obtained only from the police, and the telephone service quickly becomes overloaded. Therefore, surely a great deal more could be done to use the broadcasting services to greater effect, to tell people which roads are closed and what the position is in their area.

Mr. Howell: As I think we all know, the British are always at their best in an emergency, and that was certainly so in the West Country, as I saw for myself. Information is very important. That is why, on my tour of the West Country, I attached a good deal of importance to taking with me as may Pressmen as I could, and also to communicating regularly. People are anxious, but the emergency services do not want to have ordinary calls for information cluttering up the switchboards, when they ought to be dealing with urgent calls for help. I take the hon. Gentleman's point.

Mrs. Kellett-Bowman: The Minister has referred several times to money coming from the EEC without request, but is he aware that the money which the EEC sends will be distributed according to how the Government request it? Will the Minister please ensure that all areas of the United Kingdom which have suffered from natural disasters during the past winter will receive this help? These areas include the North-West, which was very badly devastated at the end of November and the beginning of December. Will he ensure that it receives a fair share of the EEC funds which are made available? We have already been in contact with the Minister's right hon. Friend, and I am hoping to meet him on this point, which is of vital importance to the North-West at the earliest moment.

Mr. Howell: I understand that it is of importance for the North-West, which was very severely hit by the gales. I shall consider the hon. Lady's points and communicate with her.

STATUTORY INSTRUMENTS &c.

Ordered,
That the draft Mobility Allowance Up-Rating Order 1978 be referred to a Standing Committee on Statutory Instrument, &amp;c.—[Mr. Jim Marshall.]

Orders of the Day — SUPPLY

[9TH ALLOTTED DAY]—considered

Orders of the Day — EUROPEAN COMMUNITIES (DEVELOPMENTS)

4.30 p.m.

The Minister of State, Foreign and Commonwealth Affairs (Mr. Frank Judd): I beg to move,
That this House takes note of the Report on Developments in the European Communities, July-December 1977 (Command Paper No. 7100).
The debate on this White Paper gives the House the chance to review the full range of Community activities. Some of the more important activities which it describes have, of course, already been the subject of consideration under the scrutiny arrangements. I should like to take the opportunity of thanking the right hon. Member for Bournemouth, West (Sir J. Eden) and all his colleagues for the important watchdog task that they perform on behalf of the House in their many hours of work in the Scrutiny Committee. Many of the issues described are primarily the concern of Departments other than my own. I think, however, that the White Paper brings out clearly how many United Kingdom interests are now pursued within a Community context.
There will inevitably be a number of detailed points in what will be a wide-ranging debate. My hon. Friend the Under-Secretary of State will deal with as many of them as possible in his winding-up speech.
Any single six-month period cannot, of course, be seen as a watertight compartment in the essentially ongoing life of the Community, but it provides an opportunity for a stock-taking of where we stand, particularly at a time when British attitudes towards the Community have been widely scrutinised, if not criticised.
It is worth stating the basic arguments. There have been, and always will be, honest disagreements about the merits of Community membership. There is no monopoly of truth on any one side. But I believe that the decision is behind us. Constantly to revert to the issue or to approach each problem from the narrowest point of national interest not only


tends to undermine our ability effectively to influence the collective policy of the Community in the direction which we believe to be right—and which should, when necessary, respond to the special needs of Britain—but may also tend to weaken the Community's efforts to defend our common interests, including those of the United Kingdom in the wider world.
Rather, as my right hon. Friend the Prime Minister put it, our task is
to defend the essential elements of a distinctive policy towards the EEC that will meet the legitimate concerns and interests of the British people and will strengthen unity and democracy in Europe.
Healthy roots are essential, but if we remain entangled in them we shall tend to get a worm's-eye view of immediate Community issues. Entanglement of this kind also constricts our view as to how the Community can best evolve in the common interest.
Every six months which passes increases and deepens British experience of Community membership, and, for that matter, Community experience of British membership.
The British tradition of democracy has been pugnacious and combative. In that way it has served us well. After all, we have only to look at this Chamber in which we are debating this afternoon—rebuilt after it was bombed on the insistence of its Members, most articulately expressed by the late Winston Churchill—to realise that the interests of democracy can be best protected by honest confrontation of ideas and priorities rather than by slithering uncertainties of semicircular Assemblies where truth and facts may become blurred in the consequential game of constantly changing alliances.

Mr. Christopher Price: I hesitate to interrupt my hon. Friend's impressive prose which someone has written, or perhaps he wrote it himself. With regard to semicircular Chambers, has my hon. Friend seen the plans for the spec-built Parliament at Luxembourg—the leaning tower of Luxembourg—that will be started in a few months' time? Nothing can stop its being started, and it now looks as though, at a cost of many millions of pounds, the European Community will be lumbered with that Parliament. Will my hon.

Friend say something about that in his speech?

Mr. Judd: I can assure my hon. Friend that any decision about where the European Assembly is situated will be a matter for the Council of Ministers. I thank my hon. Friend for his kind remarks about a part of my speech which I drafted myself.
As I was saying—rather than by slithering uncertainties of semicircular Assemblies where truth and fact may become blurred by the consequential game of constantly changing alliances. British Members of Parliament and Ministers are fashioned in that democratic mould. Whether we on this side of the House liked or disliked what he said, we faced a good illustration of it in the speech by the right hon. and learned Member for Hexham (Mr. Rippon) in the Third Reading debate on the direct elections Bill last week. We have taken that tradition with us into the Community.
Other member States are sometimes misled by the forthrightness with which we defend our interests into thinking that our underlying commitment to the Community is necessarily at issue. It is not. In fact, the reverse is true. As my right hon. Friend the Prime Minister has underlined, the degree to which we take our membership seriously is reflected by the degree to which we state our objectives and priorities for the Community in a forthright and unmuffled way. Other member States would also do well to remember our long candidature and the polarisation of attitudes that that inevitably entailed. I am convinced that where important national interests need to be reconciled in establishing a common policy, it is important that this should be done by an honest and open confrontation of the perfectly legitimate interests that have to be brought together.
Moreover, the people whose interests are under discussion must be assured that these interests have been given full weight and not traded off in some hole-in-the-corner manner behind closed doors in Luxembourg or Brussels. The Community must prove itself to be a collection of democratic States and not an authoritarian institution.
When commentators and others express anxiety about tough arguments in the Council of Ministers, I am at a loss to


know why. I ask myself whether they want Brussels to become a pale reflection of the centralised bureaucratic and totalitarian systems which they morally condemn. In history, the Community will be judged by the integrity and vigour of the debates between Ministers in their search for solutions in the interests of the widest possible cross-section of its peoples, not by the smooth, manipulative techniques of technocratic government.

Mr. Russell Johnston: Is not the Minister saying rhetorically that the British are the only people capable of open, democratic and forthright debate and that everything else is mean, low and uncertain?

Mr. Judd: What I am basically saying is that we have traditions of which we can legitimately be proud. We have taken these traditions into the Community, and, by bringing them to play within the Community, we shall in the long run help to strengthen it.
There are clearly difficulties since international negotiation is not the ideal way of creating legislation. But, if we expect their support we must be able to show the British people that their interests are being properly represented. For that reason, we welcome the work of this House in examining Community legislation.
The Government respect those who zealously defend Parliament's right to scrutinise and debate Community legislation and to ensure that the British national interest is well and wisely pursued. Their vigilance in following the activities of British Ministers will always be important. This is, after all, what the British democratic tradition is all about. However, what we must also ensure is that we do not lose sight of the wider picture and the need to see that the great potential of the European Community is fully exploited in areas where our interests largely coincide with those of other member States.
We in Britain have also to contend with the dangers of widening disparities within the Community. These are not the result of Community membership. They are rather the result of the differing impact of increased oil prices and the worst world recession in 40 years But it

is idle to deny the dangers of economic divergence within the Community. The EEC should provide a framework within which we can secure our national position, not at the expense of other members but by working with them.
The past six months has given some good examples of this process. To those who consider that the United Kingdom always ends up the losers in the Community, I would recall the agreement that the Joint European Torus should be set up at Culham in Oxfordshire, thus giving us a new foothold in the struggle to secure future energy resources. We also saw a satisfactory solution to how Article 131 of the Treaty of Accession, which governs the contributions of the United Kingdom and other new member States to the Community budget in 1978–79, should be applied after the introduction of the European unit of account. There was also a satisfactory agreement on the phased implementation over three years from 1st January 1978 of shorter drivers' hours for domestic road passenger and goods traffic.
On the other hand, there are those who complain that we do not put enough into the Community. Frankly, they have precious little ground on which to base that complaint. There is our substantial net contribution to the Community budget there is the valuable market which we offer to our Community partners; there is the relatively small proportion of agricultural guarantee payments which come to Britain as compared with those which go elsewhere; there is the vital contribution made by British consumption of butter—some 25 per cent. of the Community butter market.
But such a score-card approach is unsatisfactory. Where there has been progress which suits our interests, we should take due credit for it. But all progress means an accommodation of the national interests of all the Nine, and the agreements which I have mentioned fall into that pattern. If the impression is given that one member State is simply interested in chalking up its own successes, this is likely to frustrate future negotiations by creating the counter-productive impression that membership of the Community is narrowly self-interested.
The Community has to retain a balance between national and common interests, and between the narrow interests of its


member States and its responsibilities to the world at large. It must not be a rich man's club. The United Kingdom continues to play a distinctive role, and those who criticise it are too often really going for our political style and traditions—of which I for one am proud—rather than for its substance. Where there is a balance, Britain has shown herself ready to contribute as well as take advantage of membership. As The Economist reported not so long ago, our record on the fulfilment of Community obligations is good by comparison with that of most other member States. In its edition of 1st October last, it reported that in the league of prosecutions before the European Court for failure to fulfil their obligations, Britain stood sixth with 12 outstanding cases while Italy had 41, France 35, Belgium 21, Holland 20 and Germany 17.
When direct elections are discussed, more attention seems to be paid to the failure to meet the May-June 1978 target date than to the vital democratic debate that has accompanied the passage of the implementing legislation and to the commitment of the Government to the holding of such elections. The critics sometimes forget the need to respect the democratic processes which the Community is meant to embody.
To turn the argument round and take another example, the Sixth Directive on VAT, which was vital to the Community changing to the own resources system, as it turned out, only Belgium, apart from the United Kingdom, managed to get the domestic legislation through by the agreed target date of 1st January 1978. There will now be a delay of at least another year before the own-resources system is fully in effect. There were no doubt good reasons why other member States could not meet the deadline. But the contrast with direct elections is impressive.
It is when the balance between national interests and the interests of the Community as a whole is upset that dangers arise for the Community. Fisheries is an obvious example of this. The White Paper records briefly the continued efforts during the second half of 1977 to work towards a revision of the common fisheries policy. My right hon. Friends the Secretary of State for Scotland and the Minister of Agriculture, Fisheries and

Food have negotiated firmly and skilfully in the search for a settlement that reconciles our basic requirements and the interests of other member States.
Considerable progress has been made towards recognising the need for fair revision of the CFP. This is reflected in the development of thinking about quotas and conservation. I hope very much that the gap which remains between the two sides can be bridged without too much delay. The failure to reach agreement is potentially damaging to the Community's wider interests, and this is a factor which we have to take into account.
But, equally, the other member States need to remember that something like 60 per cent. of the fish stock available to share out amongst member States will come from traditional British waters and that this will happen at a time when the world as a whole is moving towards 200-mile exclusive economic zones at sea for coastal States—a virtual extension of their territory. It is no wonder that fishermen sometimes ask whether we shall gain full access, in return for a CFP, to the vineyards of our Community neighbours.
Other member States also need to recall the origins of the fisheries policy and that it was agreed on the very day negotiations for British accession were opened, that it was unbalanced from the start, and that in Article 103 of the Act of Accession there is clear and unrestricted provision for the extension or modification of existing arrangements. When negotiations resume we must look for a pragmatic solution, consistent with Community law. But it must also be seen to secure the interests of our industry if the balance is not to be upset in a way which would have a damaging and long-term effect on British attitudes to the Community. Justice will have to be seen to be done. This House would never endorse a one-sided solution that failed to safeguard our industry.
But the greatest problems facing Britain and the Community are the major world problems which ominously threaten humanity as a whole. Obviously, in the forefront of these are the inter-related problems of growth, inflation and unemployment. Of course, the ability even of Community Governments alone to make a positive impact on these problems is limited. Improvement will come largely


through an increase in the level of economic activity. Member States must do all they prudently can in this respect.
However, the Community agreed in principle in December at the European Council that the Commission should raise a loan of 1,000 million European units of account to stimulate investment, and consideration of this is being pressed ahead. There was, furthermore, agreement on a major increase in the European Regional Development Fund, of which the United Kingdom is a major beneficiary. These decisions will benefit the Community as a whole.
Furthermore, the Community has in recent months, and with British support, taken action to protect certain industries which face particular difficulties, notably steel and textiles. The White Paper describes the decision to allow the Commission to negotiate agreements involving price disciplines with the principal countries supplying steel to the Community.
Before renewing the Multi-Fibre Arrangement at the end of the year, the Commission negotiated with 31 textile supplier countries new bilateral agreements which provide a greater degree of protection against disruptive low-cost imports. I am glad to say that in the process the Community was determined to lessen the impact on the poorest developing countries, some of which rely heavily on textile exports. Our problems are bad enough, but for too many in the Third world unemployment is to be condemned to the certainty of disease, malnutrition and premature death. All of us, in the name of civilisation itself, need to keep a sense of perspective about this.
The domestic problems which face both the steel and the shipbuilding industries are being looked at at Community level. We shall play a positive part in this process while ensuring that our particular interests are fully safeguarded. We must ensure our ability to further our industrial objectives. I recall the firm words of my hon. Friend the Minister of State. Department of Industry, in the House on 24th January to the effect that we cannot accept an across-the-board contraction. Any Community policy must take account of the actual position in individual member States.
I have mentioned some examples drawn from the White Paper. There are others.
The Community has agreed to enter the final substantive phase of the multilateral trade negotiations with a mandate which includes both an offer for the reduction of industrial tariffs and a requirement for a better safeguard mechanism which would be used selectively to stop particular sources of disruption without harming normal trade. Discussion has begun on the mandate for renegotiating the LoméConvention, which continues to provide significant trade and aid benefits to countries in Africa, the Caribbean and the Pacific. The Community has also improved its trade concessions to other developing countries through the Generalised Scheme of Preferences.

Sir Derek Walker-Smith: In the context of the LoméConvention, may I ask the Minister to say whether the Government would view with favour the incorporation into the LoméConvention of an obligation on the ACP countries which are parties thereto to observe Articles 3 to 14 of the Universal Declaration of Human Rights?

Mr. Judd: The right hon. and learned Member forestalls me. I was about to come to that point. I was about to say that, if the Community is not as inward-looking as it once was, I hope that the United Kingdom will be able to take at least some of the credit.
But, obviously, there remains much to be done if the Community is to live up to its responsibilities, not only to its member States but to the world at large. For instance, we have many times made clear to our Community partners that we are anxious to see a much more substantial programme of overseas aid to non-associates of the Community in some of which there is the largest scale and most grinding poverty in the world. Although they are a useful beginning, the two ad hoc annual programmes so far agreed were very small. We must get these sums increased.
We must also resolve to press for the inclusion in the new LoméConvention of a provision allowing the Community to cut off aid to any State which is grossly infringing human rights or to ensure that aid is limited to items which benefit the people, not the regime. The present position, as we saw in the case of Uganda last year, simply will not do. It is intolerable that aid or potential trade arrangements should be used to bolster crudely


repressive regimes. All this is, of course, part of the wider ongoing North-South dialogue, and much Community time will be going into co-ordinating our approach to the shaping of a Common Fund and of its associated integrated programme of commodity agreements, to a review of policy towards the crippling debt problems of the developing countries, and towards our general political strategy in the new machinery recently established at the United Nations to oversee the many points of the recent North-South dialogue.
This review of the past six months would not be complete without reference to three areas of Community policy singled out by the Prime Minister as of special importance. Our attitude towards the common agricultural policy is based on the central objective to reduce real prices to the level needed by efficient producers. What we must do is to bring about a better balance of supply and demand. This would be of benefit both to the consumers and to the long-term health of the Community.
We are not presenting a fixed blueprint, and we do not seek to undermine the principles of the CAP. But, particularly with enlargement in view, it is essential that there should be changes in the way the CAP operates. We shall judge all new proposals, particularly price proposals, in this light. Our concern to balance better the interests of consumers and producers is already having some effect. Last year the increase in the common price level was the smallest since our accession. This year the Commission has proposed only 2 per cent. This means a reduction in real terms.
Our energy policy will be of critical importance to the United Kingdom and the Community as a whole. A realistic Community energy policy which we support will require perseverance and patience to create, and must take account of basic national interests of all member States. Progress has been made in a number of areas, including a Euratom loan scheme, recommendations on the rational use of energy and the reduction of oil consumption in an oil supply crisis.
The greatest issue facing the Community at present is undoubtedly enlargement. The Government have warmly supported the applications from Greece, Portugal and Spain. Enlargement is

crucially important to buttress democracy in these three countries. The House must face this. There will be costs, in terms of money and procedural problems to be overcome. But in our view these are far outweighed by the political gains. As my right hon. Friend the Foreign Secretary has made plain, we attach the greatest possible significance to the responsibility of the Community to further the cause of freedom and democracy in Western Europe.
Nobody should underestimate the gravity of the international economic problems which confront us. There is a real possibility that without determination and imagination the world could crash over the precipice into a new and nasty era of aggressive nationalism. The Community will not solve for us the basic issues of growth, inflation and unemployment. It cannot be used as the scapegoat for national ills, some of which are of many years' standing. But we hope that it will assist in their solution. It provides a framework within which to pursue many of our objecives, both external and domestic. This demands, however, that we keep a balance between our national interests and those of the Community as a whole. It demands a similar restraint on the part of other member States.
The Government are looking for reforms within the Community, but in a constructive spirit, aimed at strengthening the unity of the people of Europe within a democratic framework. As my right hon. Friend the Prime Minister has emphasised, we believe that changes are indeed needed in the interests of the Community as a whole. The Community is not static. Enlargement will certainly create a challenge to which the Community must rise. It is bound to lead to changes in the character of the Community. Such change will come gradually and must take account of the social problems which it involves. But the fact is that the Community has only limited resources. These must be deployed to the best effect if the Community is to make a greater impact on the problems of economic divergence which are the real impediments to the development of its full economic and political effectiveness.
The Government have meanwhile taken an active part in political co-operation of the Nine. Experience has shown that the


collective weight of the Nine strengthens the hands of individual member States, including Britain. For instance, Foreign Ministers issued a statement on President Sadat's courageous initiative in the Middle East on 22nd November 1977. In September they published a code of conduct on employment practices for companies of the nine member States with affiliates in South Africa. The Nine are discussing the code with other OECD member States to persuade them to adopt similar measures. The Nine have established their concern for human rights beyond question.
For me, there have always been two questions about the relevance of the Community as an institution. First, all the evidence of recent decades suggests that it is impossible to sustain successfully the viability of open democratic society if power and decision-making become over-centralised and over-remote. Free society is based on the concept of individual integrity and responsibility. People need to see and feel their place within it all. In an age of mass communication and better education, accountability and accessibility of decision-makers become more essential than ever.
It is because we recognise this that the British Government have set their face firmly against the concept of federalism. As I have repeatedly made plain in recent weeks, we believe that the centre of decision-making must remain the Council of Ministers and that the Council of Ministers must for its part remain firmly accountable to the national Parliaments and Assemblies of individual member States.
Secondly, economically and strategically the starting point of all that is relevant in politics is a recognition of the inescapability of international inter-dependence. It is simply impossible for any nation to isolate itself from the pressures of world event. The question arises whether the Community is the right grouping in which we should be working to find the rational international solutions. This would clearly not be the case if the Community were seen as an end in itself. It simply is not self-sufficient.
I hope, however, that in what I have said to the House this afternoon there is an indication that the Community is facing up to this and seeing its role not as a

substitute to the OECD, to GATT or to the United Nations but as a grouping of independent sovereign nations determined to work together within these wider organisations in fostering solutions in the interests of the world community as a whole.
It is naive to see any institution as an end in itself. Perhaps our views on the Community have been distorted in recent years because of a tendency to do this. For democrats committed to freedom, institutions are an instrument with which they work for the objective of human evolution and progress.
In the final analysis, how these instruments are used depends upon the will the values and the commitment of the politicians and those they seek to lead. At our best—with self-confidence and vision—I believe that we in Britain have an unrivalled contribution to make in this respect. I also believe that the Community and, indeed, the wider world are looking to us increasingly acutely to make it.

5.2 p.m.

Mr. Douglas Hurd: We are grateful to the Minister for his stock taking, and congratulate him on his new found richness of prose, although I am not sure that he kept up the impetus of his first purple passage.
It is not the Minister's fault that this debate should have a rather starved appearance, looking at the Benches and the Press Gallery. Few of us are satisfied with the way in which we discuss Community matters in this House. It is partly a matter of machinery. We are awaiting the submission of the Lord President, which is mentioned in the White Paper, about improving the machinery
I join with the Minister in paying tribute to my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) and his colleagues on the Scrutiny Committee. It is a pity that the Government while paying tribute, have organised a debate on a day when they knew that members of that Committee could not be here. Within the terms of reference that the House has given the Committee, it does an invaluable job.
I believe that in the mechanics of debating Community matters we have the worst of both worlds. We have vague general debates, rather like foreign affairs


debates, which do not attract a great deal of attention. Then we have almost legal debates on specific documents. Somewhere in the middle there should be room for debates on specific issues, regardless of the state of documentation, whether these are about the enlargement of the Community, for example, or the Davignon steel plan. There should be some way in which we can pinpoint important issues and debate them in a timely manner so that we can influence British Ministers as they go to and from the Council of Ministers.
There is also a feeling of dissatisfaction about the way in which the House of Commons reckons with its European dimension. It is partly the spirit that we find in this House. I hope that this debate will be different. But we alone among all British institutions are continuing to fight and fight again the battle of the referendum. This weakens our influence in real life, and is contrary to what practical people are doing elsewhere.
The Foreign Secretary said on D[...]h television yesterday that individual fi[...]s, trade associations and trade unions were coming to terms with the EEC and making the best of British membership of it. He is right. It may be that most of them are starting a little late, but the point is that they are now doing it. Many of us have daily contact with this process and we feel that it is picking up impetus and becoming impressive. I am ashamed that this House, which should take the lead, has fallen behind, in its tone and in sense of reality, in discussions on EEC matters. Only in this House do we scratch away at old wounds, and that makes it difficult for us to look at real issues.
All of us who support the Community have criticisms—sometimes severe—of the way in which it works. Every time we voice these criticisms there is an inane shout from below the Gangway of "You voted for it". It is possible to support an institution without believing that it is perfect. The hon. Member for Newham, South (Mr. Spearing), who is very assiduous in these debates—and I expect that he will seek to catch your eye later, Mr. Deputy Speaker—is one who criticises us for our criticisms. I sometimes think that the day on which the hon. Member makes a speech in praise of some aspect of the Community—I do not care which one—

will be the day that the House of Commons will actually have entered its adult life as a national Parliament inside the EEC.

Mr. Nigel Spearing: rose—

Mr. Deputy Speaker (Sir Myer Galpern): Does the hon. Gentleman wish to catch my eye and make his contribution now?

Mr. Spearing: No, Mr. Deputy Speaker. Indeed, I did not intend to catch your eye in today's debate. Is the hon. Member for Mid-Oxon (Mr. Hurd) forgetting the phrase in the Government's document at the time of the referendum which said that membership of the EEC depended on the continuing assent of Parliament? Does he deny that it is wrong for him to assess Parliament's view of the balance of advantage and disadvantage and the terms on which membership should be continued? If he is saying that, it is very serious and I hope that he will reconsider it.

Mr. Hurd: The hon. Member is dragging me into an argument which has no relevance to the point that I was making. Of course, the Government are right and membership does depend on the continuing assent of this House. We support our continuing membership of the EEC, but we do not believe that this institution is perfect. We do not want our criticisms of it picked up as part of a wholesale, 100 per cent. eternal condemnation of every utterance, every word, every phrase and every paragraph of every document coming out of the Community.

Mr. Spearing: Nonsense.

Mr. Hurd: The hon. Member may have a chance to think again about making a contribution at greater length to this debate.
The White Paper brings out the most important and least mentioned aspect of the Community, perhaps the greatest single development of recent years, that is, the extent to which the Community represents us—the British—in discussions and negotiations on international trade. This progress was associated particularly with Sir Christopher Soames, but it has developed very much under his successors. References to this aspect are scattered


through the White Paper and the Minister took up some of them.
For example, it is the Community that represents this country at the multilateral trade negotiations which are now taking place. It is the Community that negotiates for us with textile producers under the MFA. It is the Community that is trying to provide the international framework in which the British steel industry can survive. It is the Community that, in parallel with other member States, discusses with Japan the immensely important question of our balance with that country. It is the Community that has worked out the trading arrangements with China which may be very significant in the future. This is all technical, boring and rather neglected stuff, but it happens to be action on which hundreds of thousands of jobs in this country depend.
It surprises me that so many Labour Members—and this also applies to some Ministers—who at present represent the heartlands of British industry neglect in their comments on the Community to emphasise this essential fact, a matter that is extremely important for their constituents above all others.
The international framework within which our industries trade in the world is very much under threat, as the Minister made clear. It is a framework which the Community, rather than individual nation States, is concerned to protect and develop.

Mrs. Gwyneth Dunwoody: I do not know whether the hon. Gentleman has yet dealt with the attitude of the Commission on maintenance of the temporary employment subsidy and its direct correlation to the maintenance of jobs in the textile industry. When seeking to defend the Commission, will he give his views on its attitude to TES?

Mr. Hurd: That is a fair point. If the Community is responsible for saying to Hong Kong "There is a limit to what you may send in"—an attitude that is strongly resented in Hong Kong—and if the Commission believes, and I do not want to enter into the merits of the matter, that there are aids going to a specific industry in a way that is contrary to the Treaty, the Commission is right to examine the

matter, as the Foreign Secretary made clear yesterday.
The Foreign Secretary was also right to say that a time of unemployment is not the moment at which to push these matters to extremity. However, the hon. Lady is entitled to draw that matter to our attention. If the Community negotiates a framework of protection under which we are trading, it has a right—and the Treaty confers that right—to ask questions about some of these internal practices.
It is possible to argue whether the Community is too inclined towards free trade or towards protectionism. That is a legitimate argument that no doubt could go on for ever. But it is hard to argue the other case. It is hard to argue that we should go back in this dangerous world to negotiate in these matters as separate countries and be outgunned by the trading strength of Japan, the United States or the Soviet Union rather than to act as a Community—a body which together comprises the most powerful trading group in the world. We should develop and ram home that point more effectively than we have done.
This consideration leads us to a difficulty. The EEC increasingly negotiates as one, but it has great difficulty in reaching decisions. That is the price we pay for insisting that everybody must agree to everything. That is the result of a national veto. One would suppose from reading some reports that the EEC is in some way an efficient and tyrranical institution with overwhelming power. Anybody who has experience of the Community knows that its decision-making is weak and slow. That is the price we pay for the fact that it is a partnership of nation States in which everybody has to agree on everything.
I believe that the national veto will be with us for a long time and that any formal attempt to abolish or limit it by categories is likely to founder for some time to come. However, this makes it all the more important to try to improve the way in which the Community takes decisions by establishing the habit and discipline of working together more effectively than we do now.
One of the benefits of a directly elected European Parliament will be that it will bring pressure to bear on the Council of Ministers to reach agreement and to


establish the discipline and habit of which I have spoken. What is needed, and what is still lacking in many instances, is the minimum degree of trust and respect for each other's interests.
This leads me on to what the Minister said about the protection of national interests. So long as the Community is a partnership of nation States, nations will struggle to protect their national interests. There is nothing sinful about that. Everybody does it, and it is not a ground for criticism. I do not dissent from what the Minister said about the fishing negotiations or the Government's efforts to arrive at a legitimate agreement protecting our interests. However, where we go wrong in our debates is that we never discuss how we can protect our interests successfully in the Community. The test is not noise, nor argument nor the cheers which a Minister is given in this House. The test is that of agreements satisfactorily reached and honoured.
Our misgiving and criticism of the Government in this respect is that, judged by that test, they do not seem to us to have been doing very well. It seems to us that they have allowed—this does not apply to all of them—the bargaining strength of this country, as measured against agreements reached, to run down to a dangerously low level.
I must refer—and I shall try to do so fairly—to the performance of the Minister of Agriculture, Fisheries and Food, who in many respects looms large on this scene. I believe that the right hon. Gentleman has two objectives, either of which is respectable but both of which are contradictory.
One of the right hon. Gentleman's objectives is to seek to justify his anti-Community beliefs. Nobody who has watched the right hon. Gentleman at the Dispatch Box, or who has heard his tone of voice and his snide comments when he departs from his ministerial brief, can doubt that one of his aims is to discredit the Community to which we belong. The cheers of many of his Labour colleagues, particularly those below the Gangway, are his meat and drink, his political sustenance. There is nothing wrong with the right hon. Gentleman holding that opinion, so long as he does not at the same time think that he can reach agreements in Brussels which are satisfactory

to our national interest. The two views are in contradiction. I fear that we are reaching the stage—and this is a worry—where it is becoming apparent that these two convictions and aims of the right hon. Gentleman are not compatible.
The Minister of State spoke of the change in the balance of the CAP which he would like to see. I do not think many hon. Members on this side of the House would dissent from that view. We have had some fierce arguments over the scope and timing of the devaluation of the green pound. But on the level of common prices, the need to steer inefficient producers out of agriculture, and the need to keep access to New Zealand produced, I do not think there is a great deal of difference between the two sides of the House. I believe that the views held in this House will increasingly find an echo on the other side of the English Channel because they reflect a growing interest in the importance of the European consumer.
What has gone wrong is not the message but the choice of messenger. That choice causes us unnecessary difficulty, and it could be remedied.

Mr. Judd: I hope that the hon. Gentleman will cheer up. He seems to be a bit depressed. May I say in the most friendly spirit that I find his argument difficult to follow? He has said that the messenger is not doing a good job but that the interests of the consumer are increasingly important. Does he not agree that last year's increase in the common price levels was the smallest since our accession and that the Comunity, in putting forward a proposal of only 2 per cent. for this year, is continuing the trend and that this will mean a decrease in real terms?

Mr. Hurd: The hon. Gentleman would have been exact if he had added that the initiative came from the Commission for a comparatively small increase last year and that the Minister was obliged to agree to a larger increase and that this year the Commission has again proposed a relatively small increase. We shall have to see what agreement is eventually reached in the Council of Ministers.
I am not disputing that there has been an improvement in the way that common prices have developed. My view is that


the Minister, despite his ability and courage, cannot reconcile the aims of discrediting Europe and working for the national interest, because they are incompatible in his job.
I hope that the Minister who is to reply will say something about access for New Zealand. He will have read reports of yesterday's statement by New Zealand's Minister of Agriculture. The Government are in a strong bargaining position on lamb, because the Minister does not have to ask for a change. He could resist any change.
There are two tolerable outcomes of the sheepmeat negotiations. One would be for the status quo to continue, except that there should be no discrimination against British producers and in favour of Irish producers. The other might be a common policy that steered well away from the mistakes of the dairy products regime and guaranteed access to New Zealand producers.
It is natural that the New Zealanders should be worried about the future, and so, too, should British housewives. I hope that the Minister will be able to give more information about where the Govment stand in these discussions which, I understand, are likely to begin soon.
Discussions of national interest lead us into the question of enlargement. Some people in this country welcome the possibility of enlargement for the wrong reasons. There was a hint of this—and it was taken up fiercely on the other side of the Channel—in the Prime Minister's famous letter to Mr. Hayward. There has been an argument that enlargement will so entrench the powers of the nation States that the central institutions will fade and wither away and that attempts to reach common policies will cease because it will all become too difficult.
That is how the Governments of Spain, Portugal and Greece view the matter. I am told that the Prime Minister of Portugal has said that he would not go to the trouble of taking Portugal out of EFTA in order to join an organisation which was going to turn into another EFTA. They are anxious to join an organisation which is politically important and a symbol of the unity of the continent to which their countries belong. The political case for enlargement to include Spain, Portugal

and Greece is overwhelming and should be met.
I asked the Foreign Secretary a question yesterday and he rather brushed me off by suggesting that I should have known all about it. Having looked at the public facts, I do not think that the House does know about it. I am talking about the suggestion that the European Council, faced with significant elections in France and, possibly, Italy and the prospect of enlargement, should emphasise more clearly and firmly that one cannot belong to the Community unless one respects political rights.
There have been documents and declarations from Brussels, Copenhagen and previous Summit meetings. The Foreign Secretary said that something else was being drafted which would not be as specific as he would have liked. Can the Minister develop that and let us know how these freedoms are to be defined? Are they to be economic as well as political? What is to be said about the consequences of not abiding by them? This is an important matter.
It has been taken for granted that membership of the Community implies respect for the basic political rights which we also take for granted, but my hon. Friends and I believe that now is the right time to spell this out more definitely and imposingly.
Enlargement will create great problems, but we regard it as an opportunity to look again at certain practices and procedures of the Community that are not working as well as they should. For example, enlargement must lead us to look again at the question of languages in a European Parliament. I am much less expert on this subject than most of my hon. Friends in the Chamber, but it seems impossible that the Parliament could add to its existing burdens the burden that would fall on it if two or three new and difficult languages were imposed on the existing set-up.

Mr. Spearing: Two or three?

Mr. Hurd: I have always thought that one could get one's tongue round Spanish, but that Portuguese and Greek were very difficult. Of course, this is a personal matter.
Another topic that needs to be examined is the size of the Commission.


which will come up for review anyway if there is enlargement, and the procedures of the Council of Ministers.

Mr. Russell Johnston: It is a terribly imperialist Britain thing to say that Spanish and Portuguese are very difficult while English is the normal language of people everywhere and must be adopted.

Mr. Hurd: I am not saying how the problem should be dealt with. I was tempted further than I meant to go. The hon. Gentleman will know from his experience that we cannot add three more languages, whatever their beauties and qualities, to the existing work load of the European Parliament and expect it to function satisfactorily.
It will be difficult to reopen some of these questions, but in welcoming our new partners we must do our best to see that they are looked at again. I hope that the Minister can tell us a little more about what happened at Leeds Castle when these matters were discussed. We have had little public information about that meeting. It was chateau diplomacy and we need to know more about how existing members propose to deal with the problems.
Enlargement should be used as an opportunity to make the present partnership work better rather than worse. That is the basis of our approach. As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said, the Community has to solve the problems that he mentioned, particularly the problem of enlargement. If it fails to solve them, it will wither away. That is not what he wants, as he made clear in his speech on the Third Reading of the direct elections Bill, and it is not what we want. There has been no backsliding on my party's attitude to Europe and the votes through the debates on the Bill are clear proof of that.
We are not committed to federalism. We were not committed to it under the leaderships of my right hon. Friend the Member for Sidcup (Mr. Heath), Lord Home, or Mr. Macmillan. We have never had that commitment, though there are some of my right hon. and hon. Friends who hold that belief, as do some Members in all parts of the House.
My right hon. Friend the Leader of the Opposition said in a newspaper inter-

view last year that our children may want to think again. They may become impatient with the constraints under which we operate. But that is up to them. Our commitment is a different one. It is not a commitment to federalism. It is to make a success of British membership of the Community. It is to build on the partnership which already exists and make that partnership more effective, more democratic and more real than it is today.

5.31 p.m.

Mr. John Prescott: The two speeches that we have had in the debate tend to reflect the changing styles of what we have witnessed in the European debates. One of the most impressive things that I have discovered in my time in the European Assembly is how the mood and style have changed. We can even witness the change within the United Kingdom delegation, and particularly the Labour Party delegation, in which every point of view in the party is reflected. That led to sensitivities and difficulties in our approach to European matters.
That kind of traumatic experience is one that the Government have undergone. The first two years of our membership have been spent in establishing the position that we should take, the sort of policies we should pursue and in what style we should pursue them. There is a difference—I make no arrogant point about it—between the British approach to politics and presentation of the case, particularly in the European scene, and that of other European Governments or politicians.
The report before us covers a six months' period. I want to talk about the 12 months' period which included the British Presidency and brought the immediate conflict on the British style into the arena of the Assembly in which we worked. Our Minister did well in attempting to present what was considered to be an honest British position which was clearly being painted all the time as some kind of a national position, as if that was to be condemned. There were people in our own party, or here in Britain, who felt that there was something wrong in defending or reflecting a British or national position.
I can remember a number of debates in the political arenas in which I worked in Europe, especially in the Socialist


Group, in which it was extremely difficult to convince our comrades—particularly if one opposed Britain's entry into the Community, as I did—that there was some validity in the cases one was putting forward. One is treated contemptuously with remarks such as "You are against the Market". There is some truth in both sides of the argument. I feel that it would have been better for Britain to have stayed out of the Common Market, but that is now an academic argument. I do not think that the people would ever vote to leave the Common Market even if they were given a referendum. It seems to be a pointless exercise to become involved in that argument. Therefore, I am bound to look at the future of the organisations or institutions in which I am taking a part.
I could well be accused of seeking to take a course of action which would appear to be what I have previously called the least worst policy. Nevertheless, it is one that accepts that we shall remain a member of the Community. If we do not, events will take care of that. Politicians must make a judgment if they are to be effective in the sort of attitudes they are to adopt on the various policies, whether in the European or the national scene. The change of attitude that I have witnessed in the European Assembly is not the British arrogance, if that is what our critics choose to call it, our confidence or the intellectual force with which we put forward our arguments. The course of events has changed much more. If we look closely at these events, we can see how they are likely to shape our attitudes and how much they are shaping events to which we are asked to adjust ourselves.
The late Anthony Crosland, in his presidential speech to the Ministers of the Assembly, clearly emphasised a message that was not acceptable at that stage to the Community when he pointed out that the great emphasis in economic affairs now was on more desynchronisation in events rather than convergence. This had great and important effects on the economic problems that we were facing.
One can point, for example, to the problems of steel, textiles and shipbuilding and to the growing concern about unemployment in individual countries and in Europe at large. The idea that somehow by belonging to a larger unit

we should be able to deal with the problems of growing inflation and unemployment more easily than in the nation State was much more questionable. This does not mean that the argument in favour of the siege economy is any more correct than the argument that we should deal with problems as a Community.
One could argue that in the growing change in world economies, where markets will no longer be open to free trade and where there is a growing tendency towards greater capacity to produce rather than greater capacity to consume, we are faced with ever-increasing problems of how we are to negotiate on a world scene a European share of shipbuilding, steel, cars, electrical goods and all manner of products. Textiles are probably the first example of where these negotiations started.
All that States are doing is what multinational companies have always sought to do, to control somehow the markets. We are embarking upon the same course. If we are negotiating against powerful nations such as Japan and America, it is inevitable that our hand will be strengthened if we can argue on the basis of a European continent. We can act as a countervailing power in the share-out of world markets for world products. So there are things to be learned from the various arguments.
If it is accepted that a new kind of international order is coming about and that markets will be arranged in a more orderly manner, it may be the nature of the political deal that we shall be forced to consider the philosophy embodied in the Treaty of Rome by which economic affairs are organised in the internal concept of the market. The late Anthony Crosland taught us that the desynchronisation process would considerably affect attitudes within the Market. One example of that is that we have witnessed our European colleagues in the Assembly who bitterly opposed in the economic committees any idea of import controls now being prepared to vote for them on steel or textiles. They argue that they are temporary, but that is nonsense. Nothing is ever temporary about economic development. These measures will become permanent in one form or another.
This is a consequence of seeking to achieve an agreed share against those who


do not. They are required to make our trading partners, such as the Japanese, recognise the need for agreement. This use of a countervailing power has an effect on those who believe that somehow the free market forces, as in the philosophy embodied in the Treaty of Rome, are a means by which the invisible hand of the market could determine the economic and political relationships in the Community. That is not so. We are witnessing a fundamental change which is about to take place.
I do not find the Continentals getting too caught up about the letter of the law of the Treaty of Rome, unless it comes to TES, which we have recently seen, but that issue concerns questions of political advantage and national interest. But people recognise the real politics involved. We have tended to argue the reality of the political situation, and this has found expression in the national interest argument.

Mr. Roderick MacFarquhar: I am following my hon. Friend's argument very carefully and I find it extremely interesting. Does he draw, from his analysis of the aims of the countervailing power of the European Community, a political conclusion for the development of the Community?

Mr. Prescott: Yes. I shall come to that because it is a theme I wish to develop.
It is important to consider how we approach our relationships with other Community members. Many of them have been committed for so long to the concept of a federal Europe with economic and monetary union and the development of greater integration. A watershed for that idea was when the Tindemans proposals were put forward. They were something of a halfway house, but they suited no one and they have been quickly forgotten. There are but passing references to them in speeches, and Ministers will not permit any time for them to be discussed. The whole movement towards that concept has therefore been put back, but I believe that that is more to do with the events of our times than with the conviction that it is a wrong concept to pursue.
I have seen examples of this pursuit of national interest in various committees and in negotiations on certain agreements

within my own group in Europe when we have tried to reach compromise formulae. I recall at one stage one of our comrades telling me that he could agree to a particular proposal. When I asked him why he took that view he revealed that he had just spoken to his Foreign Minister. We have not reached the stage of approaching Ministers in that way, and I do not know whether they would talk to us if we did. Certainly we have not reached the stage of having consultations on the telephone, with them telling us what we should do. Indeed, we would not accept such a process.
As an example of my argument it is worth considering what should be done about the monetary compensatory amounts. The German attitude to this aspect of agriculture policy could hardly be labelled a European approach. The Germans were far more concerned with the consequences for their own national developments. Another example is what might happen with VAT if and when we ratify the agreement on it. Ratification would cost us less, but it would cost other countries more. In terms of national interest, therefore, it would be to our advantage to ratify, but that would be contrary to the interests of other countries.
There is a growing awareness of the reality of the politics which dictate the current situation. The latest flight into fantasy must be that of President Jenkins on economic and monetary union. This approach will be proven to be a flight into fantasy, not because it is impossible to introduce such a union. That can be done, provided the member States are prepared to pay the price and provided that the European attitude involves doing something through the economy to deal with unemployment. Unless that approach is adopted, there is little in the Treaty of Rome to solve the problem.
I do not want to go further into the question of economic and monetary union. Clearly, I shall be involved in debate on the subject both within the Socialist Group in Europe and in my own party. It is clear that the level of unemployment will increase considerably due to the cumulative effects of what has happened in the individual States. This reflects the failures of the individual States within the European context, but it


also undermines the belief that membership of the Community will help us to solve that problem.
Already the economic targets that were set by the Commission have not been achieved. Inflation rates will be considerably higher, and in the next few years unemployment will go to 10 million or 11 million. No one doubts that. Membership of the Community of itself does not lead to that situation. The situation results from the nature and quality of the economic policies that individual States are prepared to pursue. It is important to make that point in view of the consequences it can have for attitudes to the Community. We accept that a new kind of international economic order is developing, and in that circumstance the countervailing powers that arise from being a member of a larger group may be of some benefit. The influences will change the very nature and character of the present Community.
Let me turn now to the question of the Assembly. I have said that I am opposed to a federal Europe, but events will prevent such a development. One cannot have a federal Europe without economic and monetary union, and that union will be absent if the political control required for it is not forthcoming in the next decade or so. Of course, I may be dead within two or three decades, but I shall not waste the time of the House in assuming the role of the priest by saying what will happen then. The Assembly is not a parliament, and I do not want it to be so. However, I do want it to be more effective. The Minister referred to the fact that the White Paper deals with increasing the powers of this Parliament to scrutinise European legislation. The fear is that there will be a trend towards more European policies through the use of Article 235 of the Treaty and without this country having to ratify other treaties. It is essential that the promise to bring forward a stronger Scrutiny Committee along the lines of the Danish Market Committee should be carried out.
If I may turn to Market mechanisms, an ironic situation surrounds the question of direct elections in that it seems that all countries will make provision for them but they will never take place. I know that I am taking a long shot in saying that, but I feel confident that it will be

justified by events. Ministers, it seems, have committed themselves to a particular date, and in doing so they have damaged their own cause. I believe that the date will prove to be June 1979; that is the "nudge-nudge, wink-wink" message that I get. If that is the case, I believe that other member States will start to view the question of direct elections in the light of the consequences that the elections will have for them on their national elections.
Like a number of other nations, I believe that the Germans will feel increasingly sensitive. By that time we shall have had to take the political decision whether to admit Greece to the EEC. If the decision is in Greece's favour, that country will clearly argue that it should take part in the first direct election. That will cause sensitivity for Turkey, Spain and Portugal and those sensitivities will manifest themselves in political pressures.
More important, in the next 18 months, particularly in view of policies adopted on steel, shipbuilding and textiles, for which the Community alone cannot bear the blame, there will be an increasing shakeout in unemployment. It will be seen that the Community is less relevant in solving these problems and that central control and co-ordination is also less relevant. That affects the basic argument for the establishment of democratic control through direct elections. Public opinion is already not very strongly in favour of direct elections in a number of national States, and these developments will serve only to accentuate those feelings.
We are committed to holding direct elections and with these pressures coming to the surface I believe that the individual member States will start finding reasons for changing their approach—perhaps even on such minor matters as the location of the Assembly in Luxembourg or Strasbourg.
I wish to take up the point my hon. Friend the Minister made about the LoméConvention. I hope that he is successful in getting an executive clause written into that agreement. There is unity in the Community in principle on this point. Barbaric regimes which sit with us in other assemblies and condemn South Africa are just as bad as South Africa in that they murder and brutalise their citizens. I hope that this will be one effective and positive contribution


towards the protection of human rights and improvement of the quality of life in the Lomécountries.
My hon. Friend the Minister referred to fishing policy. I am sure that in the end there will be a Community policy on fishing. I say that in spite of the rewriting of history by the right hon. and learned Member for Hexham (Mr. Rippon). That agreement will have at its heart an element of dominant preference, but I am convinced that there will be no exclusivity. Everyone who has looked at this problem believes that to be the case. If there is a dominant preference arrangement it means that we shall have to look at the second stage of development in this industry. I hope that the Minister is looking further ahead.
The industry will have to be planned because the raw material resources will determine the number of ships, the quotas, the question of licensing and the restructuring of the industry. The industry will therefore have to be considerably reorganised, planned and developed. I hope that that might be considered a consolation to the area of Humberside, which will be the area most affected by a fishing agreement. It should be regarded as the centre of the fishing policy, as JET has been the centre of the fusion programme, so that it may administer and co-ordinate policy with national bodies. In that way it could co-ordinate training and research and development in the industry. It could make a major contribution to helping Third world countries, especially those in the LoméConvention, develop their fishing industries. Moreover, Europe is now providing money for conservation fleets, which will require bases from which to operate. The one area that is geographically at the centre of European coastal states where the majority of fish exists—is Humberside.
I am not making only a constituency point. The map shows that the area of Humberside is right in the centre. My area will need compensation and tremendous help when the fishing policy comes to be implemented. Those who wish to see the development of the concept of Community policy, which we shall have in respect of fishing, should consider that development in the light of the difficulties and the consequences that will be felt by the areas concerned.
I am sorry that I have spoken so long, but I consider that in the period that we

have been in the Community there has been considerable change of a fundamental kind, which Britain has greatly influenced.
My first speech in the European Assembly was concerned with defending the concept of national interests. This was a proper objective within the Community. It is the correction of those national interests which fashion the reality to which we are working slowly towards. I therefore encourage the Government to maintain both their style and policy.

5.52 p.m.

Mr. Russell Johnston: Almost all my remarks will be in a different sense entirely from those made by the hon. Member for Kingston upon Hull, East (Mr. Prescott). I hope that the hon. Gentleman will agree, when we disagree, as we certainly shall during the course of my remarks, that my views are no less firmly and honestly held than his own.
In a general debate of this sort, we can deal only broadly with a limited number of topics. I shall comment briefly on three issues. The first is our general posture, which was dealt with by the Minister of State, the hon. Member for Kingston upon Hull, East and the hon. Member for Mid-Oxon (Mr. Hurd). I shall say something about our objectives as the Government see them and as I see them. Lastly, I shall comment briefly on enlargement.
As a Liberal, I find the Government's attitude and behaviour within the Community to be profoundly depressing in terms of what I should like to see them doing. My depression is not relieved when the Leader of the Opposition proceeds to Brussels to declare that if there were ever a Conservative Government in this country their policy would be little different from that pursued by the present Government.

Mr. Hurd: I was present at the Press conference to which I think the hon. Gentleman refers. The declaration of my right hon. Friend the Leader of the Opposition was in exactly the opposite sense.

Mr. Johnston: If that is so, it was not the sense that was conveyed thoughout the British Press, namely, that the general posture of the Government was not


greatly criticised by the right hon. Lady. I did not notice the hon. Member for Mid-Oxon making any notable criticisms this afternoon. I do not think that my remark about the right hon. Lady was all that unreasonable.
The Minister of State's speech in portraying our posture was a strange, sad and funny mixture of national chest-beating—a sort of South Country variant of the old Scottish braggart's toast of "Here's tae us! Wha's like us? Damn few"—and a sort of hesitant, half-hearted recognition of the potentialities and opportunities of membership.

Mrs. Dunwoody: It's nae a bad toast for all that!

Mr. Johnston: I am willing to give way to the hon. Lady, although I am sure that it would not be to my advantage to do so.
The Minister started with a purple passage that called forth the spirits of the vasty deep. I am always deeply suspicious of Labour Ministers who start quoting Churchill, as it is usually a prelude to something extremely questionable.
The hon. Gentleman told us that the British system is marvellous, direct, blunt, honest-to-God and straightforward, and not like the system of those funny Continentals with hemicycles and compromising and odd voting systems, how lucky they were to have us, and that we should beware that they might take advantage of us.
The hon. Gentleman then plunged into a list of items that Britain had contributed to the EEC. Finally, perhaps feeling that he had gone a little far, he said "Such a score card approach is not really satisfactory." However, he had been at great pains to spell out the score card. He ended with a sort of league table of infractions before the European Court in regard to the countries that had done badly or done well.
I say bluntly, directly and straightforwardly that we are regarded by the remainder of the Community as being in it for what we can get out of it and little else. I do not like the expression "us and the Continentals" which was used by the hon. Member for Kingston upon Hull, East. Leaving aside Ireland, the Continentals are those countries on the

Continent of Europe. They are seven individual nations with their own priorities and historical pride. They are not a mish-mash of the Continent. In general, in those countries we are being increasingly considered as being in the Community for what we can get out of it and for very little else. We are regarded as not being prepared to make any real commitment, moral or otherwise, to the future of the Community.
I have been attending the European Parliament for most of the past five years since we joined, with one gap. I have noticed very much the change in attitude that has taken place towards the United Kingdom from the moment of our entry until today. It is a historical irony that we are, it seems, trying to prove de Gaulle right in his argument that the British were not committed to the idea of Europe. It seems that we are behaving rather like second-hand Gaullists without the style. Strangely enough, at the same time we are proving that his original contention was not far off the mark.
I cannot stress too strongly that our image of being concerned only with self and with short-term matters is bad in the working out of the long-term economic order, to which the hon. Member for Kingston upon Hull, East referred, and bad from the point of view of the British interests that it purports to defend.

Mr. MacFarquhar: Does the hon. Gentleman agree that, although de Gaulle may have used the argument that Britain would not be committed properly to Europe, it is a historical fact that a major reason for his keeping us out was that he felt that the Community would no longer be dominated by French influence, as it was in the days of the Six and before the change from Adenauer to Brandt, if Britain joined?

Mr. Johnston: I am sure that that was a strong element in his view. However, in fairness to history it is undoubtedly true that throughout that argument he felt that the British were not properly committed. That was his justification for the veto. To a degree, I think that we are proving him right. The bloody-mindedness that we seem awfully good at adopting is not the best way to win friends and influence people.
The Minister said "We state our objectives in a forthright and unruffled


way." That leads me to my second point, which is that we do not seem to have any clear objectives. That lack of objectives, added to the abrasive pursuit of short-term aims, adds uncertainty to irritation. We appear almost to say that we should not have objectives, that we should not be involved in any of this business of idealism, and that we must be concerned primarily to make the thing work now. That is a view that did not lead to much dissension from the Conservative Front Bench.
If I remember correctly, the hon. Mem-mer for Mid-Oxon suggested that federalism was a suitable subject for his children but not something that he or the Conservative Party would touch with a barge pole, though he admitted that there were some recalcitrant souls who thought otherwise. I am a federalist. The Liberal Party is federal in its approach.

Mrs. Dunwoody: The hon. Member for Inverness (Mr. Johnston) has got all sorts of problems.

Mr. Johnston: It is always unfair to be nasty to ladies.
Those hon. Members who keep saying that they are not federalists and that federalism is impracticable should be in a position to say something in response to certain questions. I hope that the Minister will indicate his views on these matters.
The hon. Member for Kingston upon Hull, East attacked economic and monetary union and the fanciful ideas of President Jenkins. Although the Minister did not say that, he could well have done so if it had been in his brief. I do not think he would dissent from that view. If we do not have economic and monetary union, what is the alternative? There is the great word "convergence" which is much loved by the Foreign Secretary and was used by the late Mr. Crosland. What does it mean? If the Government are not prepared to face up to any movement towards an economic and monetary union but feel that something should be done and that we need some sort of co-ordination in industrial and economic policies, what is in their minds?

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. John Tomlinson): The hon. Member will recall the speech made by Mr. Crosland

to which my hon. Friend referred. Surely the whole approach of that speech, which was widely and warmly welcomed, was that, instead of concentrating on economic and monetary union, the immediate problem was to avoid greater divergence. That was the essence of the speech.

Mr. Johnston: With respect, although I have much admiration for many of the things that the late Mr. Crosland did, I would not say that that speech, which I heard, necessarily received unrelieved applause from everyone. It was not the sort of speech that I should like the Foreign Secretary to make. It is not as simple as the Minister stated. It was not just that Mr. Crosland was saying that he wanted to avoid divergence. He was saying positively that there should be a degree of convergence without the hard, institutional shapes of EMU. I have never understood that as a concept.
Let us take the regional policy. There is not much about regional policy in the White Paper, but paragraph 64 states:
Negotiations on the possibility of a non-quota section of the Fund, to be administered by the Commission, are still continuing.
We know why they are still continuing. It is because the British Government do not want a non-quota section. It is not as if a large amount of money is involved. The amount of money spent on the Regional Fund is about 2 per cent. of 5 per cent. of the Community's GNP. In 1979, 620 million units of account are to go to the Regional Fund and the Commission proposes that about 13 per cent. of that should be spent at its own hand. If one conceives of a European Regional Fund, one has to allow the Commission, certainly following guidelines which are agreed in concert by all members of the Community, to set about some of these matters directly rather than through individual national parliaments. That is our view, and it is in part the consequence of a federal attitude.
I shall not dwell on the role of the Parliament because there is little time and we have only recently seen progress on the direct elections Bill. Our view is known. We favour a directly elected Parliament being given greater power.
When talking of objectives, even in terms of the Government's and official Opposition's approach to Britain's position, surely Britain, if it is unable to contribute much in the economic area, could


pursue a positive catalytic role, trying not to provide division, but to encourage harmony.
One of the dangers in the Community is that the great Franco-German agreement, which has been the cornerstone of the European Community, is in danger of being worn a little. That is because France is probably moving to the Left politically while many people suggest and fear that Germany might be moving to the Right. The French attitude to Germany is changing. That is an area in which Britain could play an important role. Britain could ensure that the rapprochement which was one of the most important things at the beginning of the Community is maintained.
The question of enlargement was touched upon by the Minister. He said that the Government warmly supported enlargement. He said that it was needed to buttress democracy and that the costs were far outweighed by the political gains. That is an admirable thing to say. I should like to know more about what we are prepared to pay, because there is a certain amount of double-think going on.
Everyone says that we owe a political debt to Spain, Portugal and Greece for tossing off the yoke of dictatorship. Everyone says that we must maintain their democracies and help them. But what will be the economic cost of doing that? If we are serious about this, what price are we willing to pay? Some cynical people say that most of the problems will be in agriculture and will not impinge so much on us as they do on the French and the Italians.
But the effect on the Regional Fund will be enormous if it really is to be used to have a redistributive impact within the Community. We shall have to start paying out instead of taking in. If we believe what we say we believe, if we believe that it is important that these three countries adhere to the Community, we must face the cost.
What depresses me is the feeling that the Prime Minister sees enlargement not as an opportunity to strengthen the Community and make it more cohesive but as an opportunity of loosening it and making it a loose confederation of States. Many people see the EEC as a sort of

hotted-up EFTA and not much more. They shy away from the advance of the supranational element, which for me is the vital element and one which I want to see developed. Such a development is essential if the EEC is to be able to tackle the internal economic problems of Europe and to play an effective constructive political role in the world as a whole.

6.10 p.m.

Miss Joan Lestor: My hon. Friend the Minister of State, who opened the debate in such an evangelical and eloquent fashion, has accepted the result of the referendum, as I have, and that we are now in Europe and must make the best of it. As he and I fought shoulder to shoulder in the direction of getting Britain out, I hope that when he sees my name on the monitor he will come straight back into the Chamber, because I want to refer specifically to one of the points on which he touched. I shall therefore reverse the order in which I was about to make my speech in the hope that my hon. Friend gets the message.
One of the things that worries me is a small point but it was touched upon by the hon. Member for Mid-Oxon (Mr. Hurd) and my hon. Friend. That was the way in which matters are scrutinised in this House and the way in which they come before the House after decisions have been made.
I recently came across a Press report—I have done my very best to check it and cannot find that it is inaccurate—which made the point that the EEC regulation on cosmetics, which was before the Council in July 1976, has not so far come before the House, although it should have come before the House last month, as was intended. That regulation fails to bar the sale of hair dye which contains ingredients believed both in Britain and in the United States of America to be a potential cause of cancer.
I do not want to make the point any stronger than that, but it is argued by several medical schools and the cancer research departments in this country and in the United States that those certain ingredients have a causal relationship with the development of cancer, and that the permissiveness of the EEC regulation, which has not yet been before the House but has been approved by the


EEC, allows those ingredients to be contained in hair dyes without any warnings. In the view of many people concerned with this matter, the scientists in particular, this EEC regulation is more related to commercial considerations than the possible development of health risks resulting from the ingredients.
The Department of Cancer Studies Research and the Medical School of Birmingham University confirm the likely link between those dye components and cancer. The United States National Institute for Occupational Safety and Health has made its concern well known and has issued a warning about the use of these components.
To be fair, at the time that the EEC was discussing these regulations on cosmetics and safety the scientists advising the EEC were not informed, or, rather, the up-to-date position was not then as clear as it is today. In fact the evidence was ambiguous, but I believe that it is far less ambiguous now.
In view of this information, which appears to be well substantiated, I want to know what is the method whereby this House can discuss this new evidence in relation to the component parts of hair dyes. Can we refer back the document in order that the safeguards and the regulations can be amended to take account of this?
The reason why I am so concerned about this matter is that I cannot find within the document anything by which I could have gleaned this danger. I had to go to other sources in order to find the loophole in the regulations, which have already been adopted. When a situation such as this occurs, it is very important that we have information and that the methods of scrutiny should be much stricter and much more fundamental than they are now.
It is on this ground that I pay tribute to my hon. Friend the Member for New-ham, South (Mr. Spearing). There was some indication from the hon. Member for Mid-Oxon that my hon. Friend was a rather funny person, being a watchdog over things that did not need to be watched, and that if we all kept a little quieter there would be a much smoother path for those in Brussels. I welcome what my hon. Friend has done. I wish that I had the energy and time to devote

to scrutinising what is coming before the House late at night and a large amount of stuff that no one really has the time to plough through. This is one of the problems with which we are stuck.
I welcome my hon. Friend the Minister of State—I nearly said "comrade"—back into the Chamber. I was very pleased when he opened the debate. I said earlier that he and I fought shoulder to shoulder on similar lines against Britain's entry into the Common Market but have both accepted the result of the referendum. One of the things about which my hon. Friend and I were concerned was the effect that British entry and EEC policies would have on the developing world and particularly, as time went on, on the non-associated countries of the developing world. I was very pleased, therefore, when my hon. Friend referred to the fact that, concerning the developing world in general but particularly the non-associated countries of the developing world, things were nothing like as good as they should be and that there was a great deal more work to be done.
The document refers to 45 million units of account as progress in relation to the non-associated countries. That sum has been increased since the document was printed. It has also been said by at least two Opposition Members that those of us who opposed British entry into Europe have been carping and have been prepared to see nothing good coming out of the situation.
My right hon. Friend the Member for Kettering (Sir G. de Freitas), who is not present today but is a well-known devotee of Britain's entry into Europe, has himself expressed in the House his acute disappointment, in November 1975, about the developments within the Community in relation to the developing world in general. He said that one of the reasons why he had been such a devotee of Britain's entry was that he believed that the unity within Europe of all the member nations would result in better opportunities for the developing countries, irrespective of their relationship with the EEC. He expressed his profound disappointment about this matter.
In the reorganisations that my hon. Friend the Minister of State will remember so well, we asked for a fifty-fifty distribution relationship between


associated countries and non-associated countries. As my hon. Friend has said, this has not been implemented.
When my hon. Friend expresses so warmly and, presumably, optimistically the hope that we shall achieve this by increasing the amount for the non-associated countries, I am anxious to know the basis of that hope and where the machinery is whereby this will be done. We may live on hope, but the developing countries cannot live on hope. They can live only on a basic commitment that we can give them and at which they can look in order that they can begin to measure what aid they are likely to get in the future and the effects that it will have upon them.
I remind my hon. Friend that progress on this matter has not been what either of us hoped or, I think, what many who were and are devotees of the EEC also hoped. It is a very great pity—this is why I mentioned my right hon. Friend the Member for Kettering—that people who were so enthusiastic about Europe often leave it to people such as myself to point out deficiencies rather than do it themselves, because it would make life a good deal easier if they also did this and we would not be seen simply as carping. My right hon. Friend the Member for Kettering was right in his comments.
In October 1972, the Paris Summit invited EEC countries to adopt an overall policy of developing co-operation on a world wide scale while continuing and reinforcing the co-operation developed at regional level. That was then known as the association policy. In July 1974, the EEC development countries confirmed the principle of financial and technical aid to non-associated developing countries. The amount was to be fixed by common agreement and it was agreed then that priority would be given to financial commitments to be entered into under the association then being negotiated, which became the LoméConvention.
From March 1975 to February 1976, there was the outline by the Community of a global programme of commitment to all forms of aid, including sums for the non-associated countries, rising from 1 million units of account to 2 million units of account in 1980. From 1976 onwards we got an ad hoc agreement for aid to the non-associated countries of

about 30 million units of account, later raised to 45 million and increased more recently to 70 million units of account. I do not know whether the machinery that exists at present for giving any guarantee is to be changed. It rests on hope and on the persuasive patterns that others in the Community, such as those who care about these things, may adopt. That is no guarantee, but at the time of renegotiation I and, I believe, my hon. Friends believed that there was a guarantee under-lying this.
In comparison, those associated developing countries—they are, after all, 20 per cent. of the developing world—are receiving about 3,550 million units of account over the next four and a half years. That works out at roughly 700 million units of account over one year. There is an enormous difference between the two. I have raised this point with my hon. Friend as my main point because I know that he cares deeply about this, as does my right hon. Friend the Minister of State for Overseas Development.
In my submission, unless we can get some guarantee that machinery exists through which those non-associated developing countries will be able to stand equal to the associated countries in relation to aid, technical assistance and the rest, we have been grossly misled by what we have been told as the years passed and the argument continued. For this reason, I ask my hon. Friend to look closely at what is taking place in this connection and to bear in mind the concern which we share over the difficulties which we believed this country would face in this respect if it went into Europe, resulting in difficulties in the developing world.

6.20 p.m.

Sir Anthony Meyer: I shall not follow the hon. and charming Member for Eton and Slough (Miss Lestor) except to comment that it makes it a pleasure for me to follow her rather than the reverse.
I was very struck by the tone, if not the content, of the speech of the Minister of State. I want to comment primarily on what I took to be the main burden of his speech, which was virtually that the politics of civilised confrontation, which is the tradition of British parliamentary democracy, is the kind of politics we


should be pursuing within the Community. I want to question that and primarily to speak about the role of the supranational or transnational—call it what one may—element within the Community represented by the Commission; and it is to that that I shall be addressing most of my remarks.
Let me begin by saying that the collection of flatulent platitudes that constitute the White Paper that has furnished the pretext for this debate does not conceal the fact that the period we are discussing has been one of failure, on the whole, within the European Community. The Community is working badly because the member States of which it consists are behaving badly. The French take initiatives without consulting their partners. They conclude disreputable deals with the Irish to buy Irish lamb, not English lamb and, above all, not Welsh lamb. The Germans refuse to inflate at the rate we would like them to inflate so that we could sell them more of our goods. The Italians seem so preoccupied with their collapsing democracy that they are breaking almost every rule in the book; and even within Benelux, the blue-eyed boys of the Community, enthusiasm for the Community seems to be waning.
All the member States except perhaps ourselves make difficulties over the admission of Spain and Portugal, and to a lesser extent Greece, and over the crying urgency for reforming the common agricultural policy. Every member State has some vital national interest which it puts before the well-being of the Community as a whole. I am bound to say that this is a tendency which has grown and accelerated ever since the day when General de Gaulle, coming to power almost at the beginning of the Community's history, made it plain that he was going to put French interests first whenever they were seriously threatened.
We British are quite different. It is not merely that we have certain vital interests such as fisheries policy, the price of beef or butter, the retention of the pint and the mile or the right of the lorry driver to drive all day and all night without restriction, which we are to uphold at all costs. It is rather that we give the impression, at any rate, that we will uphold every single British interest, whether vital, important or piffling, at whatever cost to the well-being of the Community.
When I used the word "piffling" at Question Time, I was taken up. It is quite true that no interest is piffling to the person directly concerned, but one has to keep a sense of perspective, and pretty well every national interest is piffling in comparison with the continuity of the Community as a whole, because the continuity of the Community as a whole is a vital British interest of a quite different order, even from such extremely important interests as securing a proper fisheries policy. I was impressed by the speech of the hon. Member for Kingston upon Hull, East (Mr. Prescott), who spoke, I thought, with tremendous authority, not surprisingly because we know the esteem in which he is held within the Community, taking into account his previous attitude in the matter. I recall, too, his very courageous attitude at the time we were having a fisheries dispute of quite another kind with Iceland.
The determination to have our way, to have the British way at all costs, is not confined only to those hon. Members on both sides who are, or were, implacable opponents of our membership of the Community. There are many hon. Members, again on both sides, strongly favourable to the Community who are determined that the Community shall not be allowed to develop a will of its own, that it shall be based solely on co-operation among sovereign States and that the role of the Commission should be reduced to zero. That, elegantly expressed, seemed to me to be the attitude of the Minister of State who opened the debate.
Those same hon. Members who say that they will not accept any role for the Commission are usually those who say very loudly that they welcome the maximum degree of co-operation and that they want more and more co-operation on more and more things between fully sovereign States. Co-operation means compromise. Compromise means concession, and concession means that there has to be some British concession. Those same hon. Members who are loudest in demanding that there should be more and more co-operation among sovereign States are usually the loudest in denouncing any moves towards any kind of British concession on any subject whatsoever.
I wonder whether there is any hon. Member in the House who proclaims himself a believer in inter-State co-operation


who is ready to say that there is one single British interest, even one piffling British interest, which he is prepared to concede to facilitate that process of co-operation.
Our recent debate on direct elections to the European Parliament seemed to be almost entirely monopolised by a succession of moans and groans about the salaries of the Members of the European Parliament, the powers that would be yielded to that Parliament and whether we should have miles or kilometres, pints or litres. I do not think that the European Community is about that sort of thing.
The Community is not about the salaries of European Members of Parliament. It is not about miles or kilometres. It is not even about stopping French trawlers from fishing in British territorial waters. I recall that not so long ago we were using gunboats to enable British trawlers to fish in Icelandic territorial waters.
The EEC is not even about stopping Russian trawlers from fishing in British or French territorial waters, though perhaps that is nearer the mark, or even about stopping Japanese cars swamping the British or European market, though again that is perhaps a little nearer the mark. What it is about, amongst other things, is whether the European Community, as the largest trading bloc in the world, can do what no one nation State can do, which is to use its immense power to pump more demand into world trade and so cut unemployment.
The Community is also perhaps about whether Europe can do in Africa what the United States Administration appears to have lost the will to do, which is to halt the relentless advance of Soviet imperialism in the Horn of Africa. It is also about whether we can use our influence, as the Americans seem to be unwilling to use theirs, to secure acceptance of the deal concluded in Salisbury and extend it to include the other nationalist leaders of Rhodesia. We have only to reflect on the way in which the French were resolute to intervene in Zaire last year, or the firm action that the Germans took to rescue their hostages at Mogadishu, to see that there is a potential for action in Africa which, if we were to combine our strengths, could be used to great effect.
Above all, however, it seems to me that the European Community is about no war in Europe. Twice in this century European civil war has developed into a world war with millions of deaths. I know that everybody says that it could not happen again, that the nations of Europe are no longer powerful enough to unleash a war on their own and that at any rate it is NATO that saves us from war, not the European Community. But that is to overlook the problem that arises from the division of Germany. I simply cannot believe that a divided Germany could have been restrained from playing East against West, even up to or beyond the brink of European war, in order to secure its unity, had it not been that the chance of playing a constructive role in the European Community provided an outlet for those formidable German energies.
Even without the hypothesis of a divided Germany, I cannot believe that without the European Community France would have indefinitely refrained from her traditional alliance with Russia in order to strengthen her position in Europe. The European Community provided her with an alternative way of strengthening her diplomacy.
The European Community was based on the need to end the murderous Franco-German quarrel. But the men of vision who founded the Community went one better. They set up the first really new political organisation to emerge since the birth of the nation State at the end of the Middle Ages. In this new kind of political organisation there was one essential ingredient, the introduction of a new element, not truly supranational but, I suppose, transnational—the European Commission, which has a very powerful but a very tightly defined role.
The Commission was envisaged not as a passive mediator between States with conflicting views but as an active initiator of policies in the best interests of member States individually and as a whole. As my hon. Friend the Member for Mid-Oxon (Mr. Hurd) expressed it very well at the Dispatch Box, in the common agricultural policy we see the Commission performing precisely that role, not only mediating between member States with conflicting interests but trying to evolve a common policy to the advantage of the member States. That common policy is not merely


the result of putting together the various national requirements and pooling them. It is a conscious attempt to devise a constructive policy in the interests of all.
Where I differ sharply with the Minister is that I believe that, federalism or no federalism—like the hon. Member for Inverness (Mr. Johnston), I am a federalist, but I do not think that that is relevant at this stage of the argument—we must accept an active role for this unique creature, the Commission, in evolving this kind of creative compromise—limited powers but a creative role.
The Commission proposes, the Council disposes. But we must beware of preventing the Commission from fulfilling its proper function of proposing. This is miles away from federalism. There will be no advance towards federalism as long as the nations retain their power of veto. More is the pity, say I, but it would be foolish to go on arguing about this.
The system of the Commission as the active initiator of creative compromise—I believe that the proper description is "the Community approach"—and the readiness of the member States to accept and work this system constitute the European Community's epoch-making contribution to political progress and the improvement of man's estate, for this technique enables real co-operation to go very far without removing the power of veto from nation States. But it can work only if the Commission is allowed to carry out its role, as it did brilliantly during the first few years of the Community's existence.
Of course, it is true that the Community approach was gravely weakened by President de Gaulle's ruthless insistence on getting France's way at all costs. But even at his most unbiddable de Gaulle was thought to be, and I think that he was, trying to strengthen the European Community in its relations with the outside world. Unfortunately, that is more than can be said of Her Majesty's Government in their present mood.
I said that the European Community was the first new political organisation to emerge since the end of the Middle Ages, a new and hopeful organisation, but incomplete, because none of the six founder nations had the parliamentary democratic tradition that we have. Surely, they thought. Britain with her 600 years of parliamentary history could supply what

the European Community lacked—proper parliamentary control over the institutions of the Community.
Therefore they looked to us, and they looked in vain. Despite the high hopes raised by my right hon. Friend the Member for Sidcup (Mr. Heath) and by the late Sir Peter Kirk as leader of our delegation to the European Parliament, it has now come to this: that Her Majesty's Government, having promised to be ready to hold direct elections in 1978, will not be ready until 1979.
Worse still, hon. Members, faced with the problem of how best to elect the European Parliament, direct all their attention to snarling about salaries and whining that the House may lose power and influence to the European Parliament—this House, which has already surrendered most of our powers and most of our sovereignty to the bureaucracy of Whitehall or to the Trades Union Congress, and which is about to hand over what remaining powers we have to Edinburgh and to Cardiff.
But it does not have to be like this. None of the eternal moaners is present today. When I talk about them, I am obviously thinking of the right hon. Member for Down, South (Mr. Powell), my hon. Friend the Member for Banbury (Mr. Marten) and the right hon. Member for Battersea, North (Mr. Jay). I expressly exclude the hon. Member for Newham, South (Mr. Spearing), who at least has something newly destructive to say every time he makes a speech on the subject. The eternal moaners are always with us, making, as it always seems to me, exactly the same speech in every single debate. That does not bother me. What bothers me is that so many hon. Members on both sides who support British membership of the Community continue to do so in a half-hearted and apologetic way, reluctant to admit that if the Community is to work, we must allow an active role—by which I mean a growing role—to the European Parliament and to the Commission. Unless those who believe in the Community are prepared to say this, I am afraid that the moaners and groaners will have it all their own way.
The European ideal is not dead. This is proved by the enthusiasm of hundreds of thousands of young people. Above all, there is the keenness of the new


democracies of Europe to join the Community as soon as they possibly can. I say very firmly that I hope there will be no delay whatever in admitting Spain, Portugal and Greece, and I believe that this must go hand in hand with strengthening the central institutions of the Community.
The European Community can do far more for its citizens—to raise their living standards, to save them from war and to give them a fuller and richer life—than any single member State. It is time for those who believe in the new Europe to say so, and to say so out loud.

6.43 p.m.

Mrs. Gwyneth Dunwoody: The hon. Member for Flint, West (Sir A. Meyer) has, I think, expressed one of the very few reasons that I would ever be prepared to consider for suggesting that the Community is playing a positive role in European development. It is that simply by existing it stops what he chooses to call a civil war and what I would call a war between nation States. But I am afraid that I differ from the hon. Gentleman fundamentally when he then goes on to talk about the Community in terms which, frankly, I do not recognise as being in any way related to the Community as it exists.
Let us start with the Community institutions. The hon. Gentleman says that here we have a wholly unique organisation which has a driving role of initiation. It must decide what is best for the peoples of Europe and put it into operation. That is a total and utter travesty of the truth. I do not believe that the Community is unique. One could say possibly that ancient Rome must have had a similar organisation at the centre in order to control its metropolitan divisions and to spread its administration throughout its existing empire.
But the real hazard about the Community organisation is a fundamental one. It is that the division is staffed at its head by politicians and by a multinational civil service, who are, if I may say so, in a rather difficult position. To begin with, if the Commissioners are to be really useful and effective, they must be soundly based in their own political system. They must be closely linked to their own States in order that there can be a two-way traffic of information between the States

and the Commission. The civil servants themselves must have sufficient flexibility and understanding in order to be able to administer what is, after all, a very complex multinational task.
The hazard is that if the Commissioners are soundly based in their own political system they do not want to find themselves in the Brussels set-up. This is clear. Many of the people who spend most of their working lives in Brussels soon become removed, bit by bit, from the reality of the political situation in their own country. Far from representing this supranational idea that the hon. Gentleman puts forward, they reflect all the worst features of the nation States, without being able to perform the political task that is best performed by the Council of Ministers.
There is a fundamental problem, therefore, with the Commission, and the civil servants in that Commission demonstrate the difficulty. No matter how efficient they are in their posts, in many cases the job above them is reserved for someone of a different nationality. The whole structure is an ossified and ossifying one. It is not one that reflects a sensitivity or a flexibility about European politics. Indeed, the very opposite is the case.
We are told that when we have directly elected representatives in the Assembly all will be totally different. I am sorry, but I do not think that that is so. I believe that we shall see a sort of professional organisation of people who are less able to represent the real strands of political thought, and who are more likely to carry on the sort of abstract discussions which we all too frequently now get in European institutions, which owe very little to the day-to-day political rough and tumble of a parliamentary system such as ours.
This is what has dispirited me about the debate. There has been an astonishingly defensive note in the speeches from the Opposition Benches. Hon. Members appear to be suggesting that we had been expected, with our parliamentary system in Britain, to make a very strong contribution, whereas all we are doing is bringing trouble to our good European friends. I wonder whether the hon. Member for Mid-Oxon (Mr. Hurd) will accept that in fact it is the very openness of the British parliamentary system which


has the most to contribute to European discussions. It is because we discuss openly in this House, argue openly in this House and debate the important facts in this House, that we are able to contribute practical ideas to our European colleagues. That should continue to be our strength. We should not be ashamed of that sort of discussion. We should try to suggest that these very qualities are of most use.
I want to address myself to one or two very simple but vital points. It is no secret that I was not a great admirer of the European Community and did not wish to see this country enter it, but what now concerns me is something which is, I think, of even greater concern. I detect an increasing tendency inside the Community to close the doors on new ideas and on new types of thought. One of the main planks of the Community is the agricultural policy. It is plain, since it spends 69 per cent. of the Community budget—and, with supplementary budgets, up to 80 per cent.—that if it is to continue, it has at least to show signs of change.
All of us in this House agree that there is manifestly a case for a completely changed common agricultural policy, and yet, far from any real practical thought being given to changes in the CAP, it is becoming increasingly clear that certain member States are actually seeking to reproduce the existing conditions of the CAP in a Mediterranean plan, which they hope to put into operation before the accession of the new Mediterranean States. In sheer cost, in economic and in political terms, the damage that that will do to the European Community is far greater than any so-called unwillingness on the part of the British to contribute to political thought could possibly do. The Mediterranean plan which is now suggested, and which has been briefly discussed in the document before the House, will, I believe, contribute to a growing and frightening tendency on the part of the EEC to build protective barriers around itself.
The CAP increasingly seeks not only to give a reasonable standard to its own farmers—which most people would regard as an acceptable attitude—but to go into competition with other suppliers outside the EEC. If there is any doubt about that, I would draw the attention

of the House to discussions that took place with the asociated countries such as Cyprus and Israel, for example, and even with large trading blocs like America.
Internally the CAP is actually contributing to the imbalance that exists in world agriculture. It shows no political will to change. We talk about the fact that the British have problems with regard to the revaluation of the green pound. We talk about the fact that British farmers have difficulty in seeking new investment. But we do not discuss the fact that it was the effect on German farmers which caused the German Government to oppose the revaluation, not because they were too worried about the British doing something which they had been asked to do for many years, but because they were concerned that the German farmers, who have been receiving restitution payments, would suffer considerably if those payments were reduced.

Mr. Hurd: I am following the hon. Lady's case carefully. Does she accept that there is another side to this argument, namely, that on the initiative of the Commission last year—we cannot yet be sure about this year—the French and German Governments, on behalf of their farmers, accepted common price increases which markedly under-recouped their farmers for the extra cost which they had borne because of inflation? Is not that a sign of grace?

Mrs. Dunwoody: I have seen very little evidence of that during the time I have been serving on the Agriculture Committee. The levels at which the overall prices are fixed are always concomitant with the other advantages that can be derived from the CAP for the Mediterranean and German farmers. There is no doubt that that is what is continually happening. It will happen again.
I do not see any evidence of a political will to admit Greece, Portugal or Spain, either in the near future or even within 10 years. There are suggestions that there should be a transitional period of 20 years for these countries before they can benefit from full membership. There are suggestions that there will have to be very long negotiating periods. I detect an astonishing lack of political commitment with regard to widening the Community. The reason is that increasingly the EEC


is becoming a small grouping of high tariff barrier protected, commercially oriented countries concerned with defending their own interests.
I take up one point made by my hon. Friend the Member for Eton and Slough (Miss Lestor). In the ACP negotiations with the EEC in Lesotho at the end of the six-month period it was made quite clear that the associate countries not only regarded a commitment of so many units of account as important but required a positive commitment on the part of the Community to change its agricultural policies. They particularly quoted the problems of sugar, bananas and rum.
There were many acrimonious discussions about the measures which the ACP countries felt were needed. Indeed, Commissioner Cheysson seemed to give a clear commitment that he was actually seeking to limit sugar production, for example, in the Community in order to help the ACP countries.
But what happened? When we came back to Europe we found ourselves faced not just with a plan which did not increase the overall level of monetary assistance to the ACP countries but with plans from the Commission to extend export rebates on manufacturing foods into the area of what is already a very delicately balanced world market. As a result, the very actions of the EEC will probably distort the whole world price.
I do not believe there is an idealistic commitment on the part of the EEC, either to the ACP countries or to the non-associate countries. Indeed, there has been astonishingly little evidence of anything of that sort. I should like to see a very different approach, not only from the Council of Ministers, but from our own Government in bringing forward a positive plan to expand the action of the EEC in this regard.
My main argument is that I do not believe that this House has yet learnt how to deal with the flood of legislation that continually pours out of Brussels. Every time we say this we are accused of taking up a British position. There is nothing wrong with that. Working in the European institutions has made it astonishingly plain to me that everyone takes up a national position. People do not find it

difficult to do. They are very happy to talk about European institutions and European politics so long as they are talking about them in distant terms. When we talk about the GATT negotiations or the ACP negotiations, we find a common element of agreement among Europeans. But when we talk about some aspect of internal industrial problems, we find very great divisions. There is a very strong defence of the nationalist position.
I do not regard that as reprehensible. What I do regard as reprehensible is the constant carping criticism in this House by people who seem to think that the British are the only people who take this line. The British are perhaps the only people who openly discuss their worries. That will be a hazard with regard to a directly elected parliament, because internally we have seen a clear demonstration of the fact that behind closed doors there will be a great deal of acrimonious, useful and constructive political discussion. But the hazard is getting the same people to make the same points openly in order that other people may learn what their views are on the possible development of Europe.
Europe is at a most dangerous stage. The old six nations are becoming more rigid in their views with regard to the political development of the Community. They are coming increasingly—the hon. Member for Mid-Oxon (Mr. Hurd) may say that it is our fault, but I do not believe it is anything of the sort—to regard the new member States as an irritant, a difficulty and an added hazard. This point has been made time and again. What is dangerously lacking is any political commitment to expand the Community in any way that will make it a stable and sensible political unit. If we do not get that, the remarks of the hon. Member for Flint, West will be pie in the sky, because his whole theory of political stability will go completely out of the window.
What is happening is that the commercialised nations of Europe are building themselves a wall of privilege and defending themselves against anyone who wishes to come in and who may damage their economic or political stability.
I would welcome the immediate accession of Spain, Portugal and Greece. But hon. Members should be in no doubt that that is not the attitude of the majority of


nations in the EEC. They are not prepared to pay for it, they are not prepared to support it, and they will do everything that they can, short of using the veto, to make it very difficult to achieve.
I believe that this House should do two things. First, rapidly it should look at the means of examining all of the legislation, internally and externally, which will affect Britain's trade. Second, it must look at the political attitudes that are being adopted. I believe that all the talk about economic and monetary union is almost so irrelevant as to waste our time. I do not believe it is a practical possibility, and I do not believe that the people who talk about it believe that it is a practical possibility. But what is a practical possibility is that, unless we look at our views on enlargement, Europe will face precisely those stresses and strains which Opposition Members wish to avoid, and I see no political will to do anything about that in the Community and its institutions or, I may say, among members of the Conservative Party.

7.0 p.m.

Mrs. Elaine Kellett-Bowman: I come from a part of the United Kingdom where people are not in the habit of mincing their words. Therefore, I am all in favour of a robust presentation of the national case when we are in Europe. However, my father used to say to me "You do not persuade people to put their best foot forward by treading on their corns", and I am sorry to say that that is what we have done all too often in Europe, especially under our own Presidency.
The hon. Member for Crewe (Mrs. Dunwoody) said that there was a tendency to close doors on new ideas. This simply is not so. The weakness of EEC policies lies all too often in the way that they are implemented by member States. I have in mind, for example, the outrageous implementation of the regional policy by the United Kingdom Government.
The hon. Member for Crewe went on to say that she would welcome the entry of Portugal, Spain and Greece immediately. I am very much in favour of this, but I can imagine nothing less in their interests than for them to be admitted immediately without going into all

the problems that they will face on entry.
Naturally, I welcomed the Minister of State's presentation of the work of the Community over the past six months, especially his emphatic insistence that the Economic Community should not be made the scapegoat for events for which it had no possible responsibility. Yet how often is that done by those who are still fighting the referendum campaign? It is astounding, for example, how many people believe that metrication was forced on us by the Common Market, whereas in fact the Labour Government decided in principle in 1965 to go metric and set up the Metrication Board in 1969.
As an hon. Member representing a North-Western constituency, and proud of it, I am particularly glad that the EEC devoted so much effort during the period under review to trying to put an end to the flood of low-cost imports from third countries which are rapidly destroying what remains of our textile industry. It is still sometimes assumed by those who are unacquainted with this vital industry that it is old-fashioned in its attitudes and out of date in its machinery and that for those reasons it cannot compete. Nothing could be further from the truth. It is the most technologically advanced and the most heavily capitalised of any industry in the United Kingdom, with the possible exception of chemicals. Equally important, its industrial relations have always been and continue to be superb. Its work force has adapted rapidly and continuously to new work methods and to every technological advance as it has come along.
Despite all this, the textile industry is rapidly being destroyed by low-cost imports from countries which can by no stretch of the imagination—not even that of the hon. Member for Eton and Slough (Miss Lestor)—be described as underdeveloped. I have in mind countries such as Hong Kong, Taiwan, Brazil and South Korea.
The old GATT Multi-Fibre Arrangement was a bitter disappointment and provided little hope of continued survival for our textile industry. In terms of containing imports, the MFA was like a colander. Now the new bilateral negotiations negotiated with 31 supplier countries will provide a greatly improved


degree of protection against low-cost imports, especially graded according to the sensitivity of the product and the degree of market penetration suffered.
Equally important, there will be automatic safeguard mechanisms to bring new sources of disruption under control, thus avoiding the situation which has arisen in the past when low-cost suppliers have sent imports here indirectly via one of the underdeveloped countries one after another as the loopholes have been closed. Now, the Community's application of the new MFA is dependent on the signature of these agreements.
I want to say a few words about the Social Fund, because I have the privilege of serving on that committee. I believe that this fund is far too narrowly conceived. Indeed, it is not at all what we in this country mean by a social fund. It is really basically a retraining fund, and the money which comes to the United Kingdom from it goes, alas, like that of the Regional Fund, into the bottomless pit of the Exchequer's Budget deficit. Indeed, when United Kingdom charities which carry out retraining have asked the Government whether they might apply for EEC training grants, they have been astounded to be told that, without their knowledge, application had been made on their behalf and the resulting cash had been deducted from their normal Government grants. That, however, is not the fault of the EEC. The fault lies in the way that we in this country conduct our affairs. However, I am happy to say that in many ways the Social Fund has been improved considerably in the review of its rules which has just taken place.
One of the greatest problems was the delays between the completion of a project and the receipt of grant. Clearly, the more hard up the institution or country concerned, the less able it was to finance its share of the project for a protracted period. Now, payments will be made by instalments—30 per cent. at the start of the operation and 30 per cent. at the half-way stage. Moreover, the paperwork has been greatly simplified by the adoption of standard costs. Many of the institutions involved have not got the clerical expertise to fill in reams and reams of forms, and this is a considerable improvement.
I look forward to the day when we can make further progress and turn the present Social Fund into a power house of ideas and assistance for imaginative schemes which voluntary bodies struggle to establish and continue. Such initiatives as they bring forward must not be allowed to die for lack of nourishment.
The period under review does not cover the new guidelines for the Community Regional Fund. Suffice it to say that the new guidelines are a vast improvement on the old ones and are the result of the experience gained over the first three-year period of working of the Regional Fund.
Again, it is not the fault of the managers of the fund in Brussels that aid to the United Kingdom is channelled wholly disproportionately to politically sensitive areas such as Scotland and the North-East, since applications can be made only through national Governments. But these are warts which can be removed.
I believe that had it not been for our partnership in Europe, our economic situation and our level of unemployment, bad though they are, would have been infinitely worse. I look to the future to iron out the problems which still exist so that all the member States can move forward together to a more prosperous future.

7.8 p.m.

Mr. William Hamilton: I have sat through every minute of this debate, and I must admit that I detect no atmosphere of excitement in it, either in the attendance or in the content of the speeches. But, like the hon. Member for Mid-Oxon (Mr. Hurd), I do not attach too much importance to the sparsity of today's attendance. After all, it is a Thursday, we have been through the trauma of the Scotland Bill for quite a while, and there is to be no vote tonight. For all those reasons, hon. Members have dispersed themselves to their various constituencies. So too much should not be made of that.
What is more relevant is the speech the hon. Member for Inverness (Mr. Johnston), in the course of which he brought in the words "convergence", "economic and monetary union" and "federalism". They are words which are never off the lips of my constituents in Fife. This is where we have failed. It may be our fault. It may be the fault of our public relations. But ordinary


people at the moment see little relevance in Europe to their problems as they see them day to day.
In the course of a speech in the plenary session last week or the week before, I said to the President, Roy Jenkins, "Please do not plug this expression 'economic and monetary union'. It is so far in the distance as to be meaningless." People who are in the dole queues, who are existing on supplementary benefit or its equivalent in Europe, do not understand what we are talking about when we speak of federalism and economic and monetary union. These may be long-term ambitions, desirable objectives for some time in the future. At the moment we in this country, and others in Europe, are bogged down with national problems. These are problems which cannot be solved entirely within a national context. That is the point we ought to be plugging.
We cannot afford to adopt a superior "Little Britain" attitude, saying "We can solve our problems better in isolation." Those days are gone. We have to live within a bigger economic and political context. The only regional context which is immediately available to us is the European Economic Community.
When the hon. Member for Mid-Oxon was talking about our lack of ability to conceal what is least important to our national interest the better to get what is more important, my hon. Friend the Member for Crewe (Mrs. Dunwoody) interjected from a sitting position with a revealing comment. I took it down. She said, of our Ministers, "They are doing so well that they are unpopular." That is our trouble. Whether we like it or not, whether it be in NATO, the United Nations or any other international organisation, we have to learn how to compromise and when to compromise. There are several ways of saying "No." Equally there are several ways of saying "Yes."
The Minister of Agriculture, Fisheries and Food came back to the House seeking the cheap plaudits of those on the Labour Benches who are anti-European anyhow. When he was Chief Whip in the 1964–67 Parliament he took us through the Lobby on a three-line Whip in favour of entry into Europe. My right hon. Friend Is, of course, entitled to change his mind. We all are. But it is no good adopting that posture and then going into

Europe and trying to get compromises from people when he will not compromise. My right hon. Friend very nearly lost us the JET project as a result of what he did about agricultural prices a year ago.
I remind my hon. Friend the Member for Crewe that when Nye Bevan was trying to get the National Health Service legislation through the House—no one dares oppose the principle of the National Health Service now—he sought the co-operation of the doctors. This is not an exact analogy but it is close enough. We are trying to get bitter opponents on to our side. Nye had to compromise on certain fundamental principles. We are living with them still. The private pay beds were a direct compromise which Nye Bevan had to concede to the doctors to bring the National Health Service into existence.
I want to make one or two comments about the state of the Community which are dealt with in the document before us. The document deals with immediate problems. It is unfortunate in some ways that the idealism with which the Community was established has not disappeared but been very much diluted by the proper concern over immediate problems. I have in mind problems such as unemployment, inflation, sluggish growth and the worldwide recession to which the Minister of State referred. It is the worst recession in 40 years.
Does anyone, irrespective of the side of the argument he is on, believe that any of these difficulties could have been more easily solved, or would be more likely to be solved, if we had remained out of the Common Market or if we got out now? Does anyone seriously believe that we can better solve our problems outside the Community rather than inside? Who believes that we can solve any of our problems alone, whether they concern defence, foreign policy or whatever? The hon. Member for Mid-Oxon mentioned the trade negotiations which the Common Market is undertaking on our behalf. We are better off for that.
It is much more effective that the Nine should speak with one voice than that there should be nine separate voices. The influence we have on South Africa, one of the most detestable regimes in the world, is the more powerful because we speak with one voice, the voice of the


Nine. The Minister of State mentioned the undesirability of trying to gauge the advantages and disadvantages of membership simply by arithmetical calculation. I am afraid that we all do it. We try to put the pluses on one side and the minuses on the other. It is strange that people who describe themselves as international Socialists should say, almost as a reflex action "If we have not got more out than we put in it is a bad thing." Even assuming that we could do those sums, I do not believe that that is a very attractive philosophy, certainly bearing in mind the principles we believe in.
The hon. Member for Flint, West (Sir A. Meyer) referred to certain ideals with which the Community was inspired. No man or woman in Europe under the age of 30 has known what a world war was like. I do not say that that is simply because of the existence of the Community. There is, however, no doubt that the Community has made a tremendous contribution in this direction. The fact that the Nine—I hope it will soon be the Twelve—can get round the table and talk to one another, seeking to solve extremely difficult problems, national and international, economic and political, is a great help. The economies of these countries are so interlocked that war between them would be impossible.
The European Coal and Steel Community is in many way the most important organisation within Europe. War between Germany and France, the countries which primarily caused the two world wars in Europe this century, is impossible now because of the interlocking of the iron, steel and coal industries of those countries. That is worth more than 5p on the price of a pound of butter.
When the argument is reduced to the price of butter I say to those under the age of 30 "Are you prepared to pay extra for your butter if, by keeping within this institution, you avoid the horrors of war that your fathers and grandfathers endured?". I know what the answer will be. The young people know. They have a much longer view on these matters than the older generation.
The Nine are pursuing common aims in foreign policy. My hon. Friend the Member for Crewe has visited Israel. Why is Israel interested in the Community? It is because the Community is the biggest

trading bloc in the world and Israel wants to be involved with it. It wants some kind of agreement with it. My hon. Friend has played her part there. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has visited the United States under the aegis of the Community engaged in the same exercise. As the world's biggest importer and exporter the EEC is playing a leading role in the North-South dialogue and in the Helsinki agreements, in detente with the Soviet Union, even with the COMECON countries. They are anxious to increase their trade with the European Community.
My hon. Friend the Member for Eton and Slough (Miss Lestor) was not quite happy about the LoméConvention aspect, but it is the intention of the Community to help these countries. There is a better prospect of giving them more help through Europe than through separate national States. Our record on overseas aid is not all that great—in fact, it is something to be ashamed of. The prospects for aid are far greater within the European context than outside it.
I return to the question of pluses and minuses. This is not an attractive argument, but since it is continually put up by some of my anti-European hon. Friends, I feel that I should put some figures on the record. Since our entry our gross payments to the EEC budget have been just over £2,000 million up to the end of 1977. In addition, we have paid some hundreds of millions to the European Investment Bank and the European Coal and Steel Community. Our total contributions to the budget would be about £2,500 million. Aid received by the United Kingdom in the same period has totalled more than £2,000 million. If we insist on doing this squalid exercise, it is more or less a rough balance.
It is true that most of the aid we have received is in the form of loans, but they have been at preferential rates of interest and they have helped in the retraining of young people and the restructuring and modernising of our coal, steel, agriculture and fishing industries and in North Sea oil. European investment has been ploughed into these areas of direct national interest.
Total loans from the Regional Fund were £18·7 million in January this year and £60·8 million for 1977 as a whole.


I have comparable figures for help given from the Social Fund, from the agricultural guidance fund and from the ECSC.
I have one or two examples of what has happened in Scotland. I mention this particularly because of my constituency interest. These figures have not had the kind of publicity that they should have had. It is not generally realised just how much help has been given by the Community in the form of grants and loans. Of the £18·7 million just announced for the United Kingdom from the Regional Fund, £6·75 million is going to Scotland.

Mrs. Dunwoody: About one-third.

Mr. Hamilton: Yes, it is about one-third, and my hon. Friend complains about it. But she is not a Scottish Member. I am, and I welcome the aid. Of that £6·75 million, £3·1 million will go on the establishment of a whisky blending, bottling and casing complex at Shield-hall, in Glasgow. There will be great cheers from the Scots at that news. Another £3·3 million is going to Shotts, in Lanarkshire, for producing diesel engines, and there are lesser projects in the Isle of Lewis and the Isle of Skye. These are relatively small in cash terms, but they are very important to small communities.
I shall give a more substantial example of European aid. There is a £25 million loan for improvements to the Edinburgh sewerage system. Edinburgh has been Tory for goodness knows how many years, and its sewerage system has been sadly neglected. Now it will be given help from the EEC.

Mr. Prescott: While I appreciate that all aid is welcome for Scotland, Humberside and other places, I maintain that the aid is only proportional and a very small proportion of the total allowance made by the State. Surely my hon. Friend is not suggesting that these projects would not have gone ahead without the European contribution.

Mr. Hamilton: Certainly I am. The Edinburgh project would not have gone ahead. Of course, these are small sums compared with the total that is being paid, but they are very important. We received about £300,000 from Europe for a reservoir in Fife and we strove might and main to get that cash. It is very important, so let us not underplay it.
It is argued by some that the EEC has not got a human face. I think it has. We must tell our people that many of the improvements taking place in the training of unemployed people and young people, and in the restructuring and modernising of industry and infrastructure are being paid for in significant proportions by European funds. The sooner we say that and are proud of it, the better.
Grants totalling more than £400 million have helped more than 20,000 British workers to retrain. Funds from Europe have been used increasingly to help handicapped people, to stimulate the creation of jobs, and to combat poverty. In terms of national aid, these are small sums, but they are none the less important.
I have been a European ever since the idea of a Community was pioneered. I make no apology for it. I believe that our future lies in closer and closer co-operation within the Community. I regret to say that my Government's record since we entered the EEC is not good. We have given the impression all the time that we are reluctant partners. The reason is that we safeguard and protect our national interest with much less assiduity than others. We are not as skilful as they are. We use abrasives rather than lubricants. We must learn to use the lubricants. At the moment this House is so divided that it must be run by lubricants. We have to learn to live with the Liberal Party because it is enabling my Government to survive and if they can survive for another 12 months it will have been worth while. I try to be nice to the Liberals, even in Europe—

Mr. David Stoddart: Why?

Mr. Hamilton: Because life would be much rougher if I were not.
The United Kingdom will stay in Europe. It is unthinkable and unrealistic to pretend that we shall get out. Let us make it work. Let us stop nagging. Earlier in this debate somebody said that we could teach the Europeans a lot. We can teach them nothing. They can teach us a lot. Let us get off our high horse and refuse to accept this superiority. We need the Europeans more than they need us, and the sooner we realise it, the better.

7.30 p.m.

Mr. Hugh Dykes: We have just heard a refreshing speech by


the hon. Member for Fife, Central (Mr. Hamilton). His views have been well known for a long time, but some of the elements of his argument are not so well known. How refreshing it is to hear such views from the Labour Benches, because on these occasions the hon. Gentleman has a sense of isolation.
The hon. Gentleman emphasised specific ways in which the Community gives aid and assistance to this country in the provision of highly desirable projects. In comparison with the funds available nationally the sums involved may appear to be marginal, but they are important items of expenditure and should be brought home to the British people in practical bread-and-butter terms. They serve to emphasise the benefits of our membership which have been conferred upon us so far in our membership of the EEC.
How right the hon. Gentleman was to underline, with all the emphasis at his command, that the net cost of our membership amounts to a substantial figure. Compared with the figure envisaged in the original White Paper, that cost has been very modest. If we go back to the end of 1977, we see that the net cost, excluding ECSC payments, has been of the order of £100 million as against an annual expected cost of £500 million. Therefore, the net cost, even allowing for inflation since 1973, has been modest.
It appears that the United Kingdom will soon be moving into a position of net surplus in accounting terms. We shall be receiving more than we contribute. The purist economist will argue that that is already the case. I have excluded the net amount of subsidy which has resulted from the green pound arrangements—which figure is now substantially less than it was but nevertheless still comes into the calculations. At its peak, that figure must have been around the £300 million mark when we bear in mind the pressures on the £ sterling in the past. Therefore, one can now exclude that consideration. In other words, the figures have already provided a surplus.
The political and chauvinistic arguments—and I am ashamed that a chauvinistic standpoint is taken in this country, which has always been internationalist in spirit—appear all to be about money, cost and benefits. These

matters must not be examined merely from the narrow point of view of contributions, aid, loans and the net amount set out in various budgets, because when we compare contributions with receipts we find that we are doing very well indeed.
I hope that the Government will acknowledge these realities. It is all very well to dismiss this argument and concentrate on the difficulties in negotiations in various Community activities, notably on fishery matters, where we have faced enormous difficulties, but the Government must not feel ashamed of saying to the Community that we are grateful to our fellow partners for their action on various fronts. We can make that clear not in a cringing sense but in an objective fashion. There used to be an old television commercial, which has now been dropped, which ran under the slogan "Get the strength of the insurance companies around you." That is what is happening to the Community in its dealings with this country.
As a specific example, I instance the help given to handicapped people. I have a number of such people in my constituency, and I know that they exist throughout the country. Those constituents are beginning to appreciate the amount of money that emanates from the Community. In other words, they recognise the fact that assistance comes not merely from national funds. I could cite many other examples of such assistance, particularly applying to the more depressed regions, where the benefits of our membership have been considerable.
I join with the hon. Member for Fife, Central in his feeling that the Community should be developed even further. I feel that the Community's budget is too small and should not be restrained and held down by national member Governments and States. The budget in the Community is not similar to our national Budget since it has no strategic implication in terms of deficit or surplus. It is a passive system of receipts and payments only.
We must appreciate that with the prospect of continuing unemployment there will have to be continuing restraint by national member Governments on public spending. I believe that this reinforces the argument aimed at increasing the Community budget. Any increase in net


expenditure by the Community at the margins will not have a deleterious effect on national spending in the domestic economy.

Mr. Prescott: Why not?

Mr. Dykes: We could get into a long discussion on that matter. The amount of money being put into the Community's budget envisages that payments out must equal receipts or contributions inward. The Community budget is a self-contained budgetary device and not a budget with leaks at the margin on the lines of most national budgets.
I believe that we should build up the Community budget, which is now only about £8,000 million, getting on for a figure of £9,000 million. Even that is a tiny sum compared with the resources of the Community. It is impossible to say what will happen as the Community takes on more members, but obviously a larger sum will be required in a few years' time.
I personally would welcome a substantial and early increase in the size of the Community budget. It would be more realistic to set that budget in the region of £20,000 million. I believe that an increase over a short period would not have any harmful effects in taking away resources from national economies if there are sufficient growth rates in those national economies to sustain higher contributions. There would have to be inducements for the member nations to achieve that kind of target.
I do not wish to see more money being devoted to the primary element of the Community's budget, three-quarters of which is devoted to agricultural support, price maintenance, intervention, investment and all the rest of it. Those devices have probably reached their limit, even though farmers have lost out in terms of receipts in the last few years in the light of inflation.
I should like to see the situation stabilised to allow for a certain element of inflation and modest price increases. Let us build up the other things. Why is the Social Fund still so small? Why is the Regional Fund so pathetically small? Why does not the Community spend more of the Regional Fund in the depressed regions, particularly in the larger countries?
I wish that the hon. Member for Kingston upon Hull, East (Mr. Prescott) would stop making sedentary interruptions. He made a long speech, to which we listened with great interest, and I am sure that one day he will try to speak twice in the same debate. On this occasion he is not working under the dual mandate which impressed us so much recently when he made a speech and immediately left for Brussels. I am pleased that he is able to stay tonight, and I hope that he will remain here until the conclusion of the debate.
It would be a key priority for the Community to spend more of its funds in larger countries. At present, it is only a pinprick. We could have an elaborate debate with clever people on both sides of the House arguing that the Regional Fund of the Community was just as effective as the thousands of millions of pounds spent by national Governments to little effect in the regions. If the hon. Member for Kingston upon Hull, East had argued for a different approach by the Community and by national Governments, I would have been tempted to agree with him, but I cannot agree with what he said about the Community not working properly while national money had some sort of magical effectiveness.
Perhaps I have dwelt too long on this aspect of the Community. There is a lot more to be said, and some matters are dealt with in the White Paper, which is one of a series that the Government will be producing every six months.
The current White Paper deals with the period of the Belgian Presidency. My hon. Friend the Member for Flint, West (Sir A. Meyer) said that this was a period of failure for the Community. To some extent that is true, but the leadership of the Belgians has shown again that the smaller countries in the centre of the Community remain, despite all the difficulties, the second thoughts, the changes of direction and, to use the ominous words of the hon. Member for Kingston upon Hull, East, the development of the new order, the most European and communautaire of the member States.
I do not want us simply to accept that fact and to say that we are not like them. The Foreign Secretary recently made the amazing and controversial statement that we are an island. I do not want us simply to accept that we have different attitudes from the Benelux countries.
It is notable that the striking exception in terms of attitudes to the Community among the four largest countries is the Federal Republic of Germany. I had the pleasure of attending the German General Election in October 1976 and I saw how, even in a national election, the Germans are more European-minded than any other members. We can all swap comparisons and say where the pluses and minuses are, but that was a remarkable manifestation of German political life.
Cynics may say that there are obvious reasons for the attitude of the Germans and that we should remember what happened between 1933 and 1945. Perhaps the Germans also see it from that point of view, but as a result of their economic success they have had to pay more into the Community than they have got out, except for their agriculture. For all that, they remain devoted adherents to membership and to the ideals and long-term political and economic objectives. I want us to have that sort of psychological commitment, and there is no reason why we should not share that attitude.
Italy has been preoccupied with many problems, and we sympathise with the Italians, but they are still pretty European in their outlook, even though they have different characteristics and traditions.
In the middle, between Britain and Germany, is France. The old attitude in this country used to be that France was a Gaullist nation which wished to use the Community for its own national interests and for no other reasons and that France had no psychological commitment to Europe. I do not believe that that view is accurate now.
France is a very European-minded country. I fear the wrong results in the French elections because they may change certain attitudes to the Community—though I doubt it. I should prefer the Fifth Republic regime to continue so that we can see the build-up of the psychological commitment in France which is an increasingly agreeable manifestation of French political attitudes to their neighbours and fellow members.
I do not wish to be unpatriotic or to detract from the achievements of this country, but the French are right to express dismay, not over British attitudes

but over the behaviour and attitude of the Government. I except, in order deliberately to embarrass him, the Under-Secretary of State for Foreign and Commonwealth Affairs, who is now on the Government Front Bench. I do not accuse him or some of his colleagues, but there are some leading lights in the Administration, notably the Minister of Agriculture, who have done immense damage in the Community.
We have to measure every element against other achievements. I am second to none in praising the Minister of Agriculture for his robust attitude in certain circumstances, for example over fisheries policy. It is not a contradiction for me to add that intransigence in negotiations for its own sake, which the right hon. Gentleman is so adept at displaying, is highly damaging and stiffens resistance from other member States when something important to us comes up later.
I was pleased at the decision to site the JET at Culham. That was a triumph for this country and for the Community. It showed that the Community is capable of making that sort of decision. I fear that it was delayed because of the previous attitude of the Government to that and related matters, but I am pleased that the Secretary of State for Energy welcomed the decision and I hope that his attitude towards the Community will now be more amenable.
The White Paper has been described as platitudinous. I suppose that it is, but the Government should be given credit for providing a comprehensive, if rather unexciting, document listing in considerable detail everything that has occurred or will occur as a result of the six months of the Belgian Presidency.
There are a number of matters on which I should like to question the Minister. Paragraph 44 of the White Paper says:
At present, vessels of Community States are not fishing in Soviet waters and Soviet vessels are not fishing in the waters of Community States.
Have there been any infringements recently? Is that statement still true? There are nasty rumours about certain plundering operations and, although there have been denials from certain quarters, they have not adequately cleared up the matter. I hope that there is no ironic reflection on the discipline exercised by


our industry while we are trying to draw up a proper Community policy. That would be very worrying.
Another paragraph in the White Paper deals with co-ordination of national economic policies. This is a large area and it would not be right for me to try to elaborate on it in minute detail. It is a subject that needs an energetic approach by all members, but particularly by Britain. One of the reasons for that must surely be that to which the hon. Member for Fife, Central and I referred earlier, which is the amount of money that this country is now receiving from the Community. This is a very good thing. We welcome it all. We shall see it develop as time goes on.
But one of the sad reasons for that is that we are now getting more than we expected as a result of our differentially poor economic performance in recent years. That is, therefore, the cybernetic mechanism of the Community, which means that if a nation is doing well economically and its GNP builds up, it gets less out of the Community. If that happened to us, if we had been close to Germany in our output productivity and the size of our economy and resources, we should have got less out and have had to contribute more. That is the black side of the reasons why we are getting more money than we expected.
That raises problems of economic co-ordination and convergence, as was referred to by the hon. Member for Inverness (Mr. Johnston). He got rather mixed up. I do not know whether I am misrepresenting him, but I thought that convergence and the need for resumption of economic convergence through developing concerted economic policies in the Economic Council and elsewhere were a concomitant of and the prelude to—or a bit of both—economic and monetary union. I thought that the hon. Gentleman said that one was a substitute for the other. He began to say that at the beginning, and he seemed to change his mind and was not quite sure. I regard convergence and the resumption of convergence as one of the most important tasks facing member Governments in the Community.
But it would be easier and tempting for us to resort to the easy way out and think in terms of Europe à deux vitesse and all the rest of it. There are many

variations. But the two-speed Europe is all right for those who believe that we cannot possibly catch up. I should like to see this country in the next five to 10 years catch up with the more successful European economies, and I include France. The Fifth Republic has been an outstanding economic success. I do not see why we should have to trail behind it. I hope that what has happened in the improvement of our financial statistics in the last few months will be followed by economic recovery in the next few years. That recovery must be a real recovery, not a recovery based on the artificial subsidies of North Sea oil. The recovery should be based on real growth and expansion of production so that we are able to involve ourselves enthusiastically and positively in convergence.
I should like to know whether the Minister thinks that this is a marginal matter which he will deal with in a dismissive way or whether it is an essential factor in the Community's economic future. In that context, I very much hope that the Community will more or less give up this artifical behaviour each year—the sort of ritual of drawing up economic guidelines. We all know that the economic guidelines drawn up by the Commission and submitted to the Council are exhortations to each member State to do what it is doing anyway. They are always couched in cautious phrases to fit in with the policies of individual Finance Ministers so that they do not put anybody's nose out of joint by the concerting of demand management economic policies. That is a reflection of what is already happening.
Let us have this new system in which the Finance Council produces a report at the beginning of each year based on a decision reached through the principle of unanimity. I think that it is possible, on decisions by those Finance Ministers, to concert demand management policies and other economic policies for the year ahead, and for the outcome to be meaningful. Economic and monetary union is an enormous field. The White Paper refers at least tangentially to it. I do not know how this will work out. No one knows. Most critics are right. The more modest, limited critics say that President Jenkins was wrong to blurt out the grand design all in one go at the beginning. He could have done it gradually and built up to a crescendo later on.
I am not sure that we can argue that either way. But let us not now drop those objectives. It is not true that economic and monetary union would represent a federalist Europe—nowhere near it. All that could be done without any federal consequences and conclusions of any kind. Let us remember, and keep repeating it, particularly in our late-night prayers and whenever it may be, that Europe is a series of co-operative efforts with common institutions and a background treaty or constitution—the Treaty of Rome. It does not have the automatic federalistic implications that some people say it has. It could have if people wanted it to. But there is no reason why they should. Economic and monetary union should mean just a common structure of economic decision-making with the economic fund for monetary co-operation revived and active and operating without meaning anything more, at least for the next few years.
Why are we terrified about what is a reasonable and sensible contribution to the debate and which would produce much more successful economic policy? Without that arrangement, we still have a situation in which the German Finance Minister is going one way, refusing to expand and pursuing an over-cautious policy, the French may be half-way in between and we are anxious to get going again—at least, I hope that the Chancellor of the Exchequer is. This is most unsatisfactory.
At paragraph 51 on page 9 of the White Paper there is an interesting reference to the European Council agreeing to
the establishment, on an experimental basis"—
those are interesting words—
of a new Community loan of 1,000 MEUA to assist industrial investment. The requisite finance will be borrowed by the Commission and on-lent and managed by the European investment Bank.
I believe that I am right in saying—unless there have been a number of small special loans—that this is the first time it has been done. It is interesting and most encouraging, and I hope that it will continue and develop in the future and that there will be other examples.
I should like to see the European Investment Bank extend its resources and operations. That would need a change in

its terms of its statutes. It should have to be able to lend more than £50 million in one go. I would like to see it become involved in the financing of the Channel Tunnel. It would be a good idea if the Minister could make a name for himself by encouraging some of those things and by making a few dramatic announcements tonight. However, I suppose that it is over-optimistic to expect something like that.
On page 10, at paragraph 54 of the White Paper, I take the Minister back to the point in the last sentence:
UK Contributions to the Community Budget.
I refer him to Article 131, which says:
the…deficit on the Budget will be financed from extra-budgetary payments.
It is quite right to pay tribute to the fact that this country has adopted the VAT Sixth Directive. That was not quite what certain anti-Marketeers were saying when the directive was coming to a final conclusion last year, but now they are apparently proud of it. Other member States have been backsliding and failing to meet our timetable.
It says about half-way through the paragraph that the resulting deficit on the budget will be financed from the most favourable of
each of four alternative methods.
It continues:
These arrangements will leave a final small financing gap; the means of financing this will he decided later.
I should like to know from the Minister what he thinks will be the size of that gap. "Small" could mean large, but I should be interested to know his figure and also what is meant by the phrase
the means of financing this will be decided later.
I would refer to paragraph 63 on page 11, which mentions the United Kingdom exchange controls. Will the Minister be able to confirm tonight or later—I have put a number of points and it would be unfair to expect an immediate reply, since his parliamentary responsibility is more a global one on the Council of Ministers than that of the individual subject areas—that the Government will be able to continue their relaxation of exchange controls in the early future? There is a substantial hope in this country—I have no interest to declare on the matter in a direct sense—that exchange controls will be further relaxed


and that what the Government did in a cautious and tentative way at the end of last year will be built on for the future.
I hope, for example—here I have a direct interest, I must say with emphasis—that the premium currency system for portfolio investments will be done away with completely. At the moment we only have the demise of the 25 per cent. Surrender provision.
I would end by dealing with the earlier remarks of the Minister of State when opening the debate on the future development of the Community's institutions. We have had our debates on the European Elections Bill and there is no need for the House to dredge these arguments up again. I believe, however, that there are hon. Members who, although they would not declare it too stridently at the moment, hope optimistically that the Community is not only here to stay but will grow in strength and cohesion and that its institutions will continue to develop.
Too many hon. Members on all sides are beset by an exaggerated anxiety that the Community is not very popular with the public and that they had therefore better keep quiet about it, or, if they refer to it at all, grumble about how awful and wicked it is. They feel that they must say how terrible and wicked the awful European Commission is, proposing as it does dreadful things for this country such as the compulsory installation of bidets in British bathrooms, that British families would have to speak French after 8 o'clock at night, that we should have to drive on the other side of the road, and so on.
This sort of attitude is adopted by some of the more prominent newspapers in this country, and they do an ill service to the people in building up these exaggerated fears. Inevitably, when the cohesion and development of the Community are taking place, it must mean that the Commission is entrusted with the task of producing draft legislation and that it will bring forward a great many proposals. I pay tribute to the members of the Press—at least, I would if they were in the Gallery—for their activities in Brussels in picking out draft proposals and provisional ideas for legislation and rushing a signal back to London. They seek out what the awful and wicked European Commission is pro-

posing to inflict on this country. Yet even a couple of years later, because often Community legislation takes a long time, we find that the original proposal has been changed and made much less terrifying and less wicked. I hope that the British Press will pursue a more responsible attitude in this respect and refer to the plus side of membership, to the money that we are getting from the Community and the other advantages.
I do not believe that the British public are as scared of or as unenthusiastic about the Community as are some politicians in this House. There is negative feeling in this Parliament about the Community and about our membership, and it needs to be energetically counteracted. I find on the occasions when I am addressing meetings, not of political activists but of people who are not necessarily tied to one political party or another, that there is a much greater interest in our membership of the Community than we believe. If only politicians were prepared to talk more about the Community, to explain it further, complicated though it may be, and to put the advantages as well as the difficulties, that would be most helpful. Let us try to do that.
In that context, if the House could secure proper scrutiny in the future we should be able to survey the Community and particularly the Commission far more effectively, and that would go hand in hand with the development of the European Parliament. It is perfectly legitimate for this House to castigate the Minister for himself having agreed to delay the direct elections Bill last year and now, at long last, to welcome the fact that the legislation is through the House. We can now build on that and build up the Community, and in that way have reports more frequently in the future than perhaps every six months.

8.5 p.m.

Mr. Roderick MacFarquhar: The hon. Member for Harrow, East (Mr. Dykes) will accept that I am as committed a European as he is, and, therefore, I am sure he will not mind if I take issue with him on one point he made.
The hon. Member gravely underestimates the enormous psychological leap that the British people have made in going into Europe and accepting membership of the Community. If he pauses


for a moment to think back on the history of this country and the way it has always eschewed Continental entanglements and played one Continental nation off against another for, in the words of the late Hugh Gaitskell, perhaps a thousand years of history, he must accept that the change that has taken place in the last 30 years, with the building up especially in the last 10 or 15 years of the attitude which led us into the Community and led the people to endorse membership by two to one in a referendum, has been remarkable.
I do not criticise as strongly as the hon. Member or my hon. Friend the Member for Fife, Central (Mr. Hamilton) the attitude of Labour Ministers. I do not say this simply because they belong to the party that I support. They are reflecting the psychological problems which will continue for some time as Britain merges more and more closely in the way that both the hon. Member for Harrow, East and I wish to see.
But I do want to take up one matter with the Minister of State and to look critically at the Government's attitude on it. It is most striking that my hon. Friend and other Ministers are critical—rightly so—of the common agricultural policy, a policy which was formed without us in mind but taking account of the attitude of the nations which are protected by it. What is quite reprehensible and unacceptable, however, is that my hon. Friend the Minister, literally in his next breath, referred to the attitude we should adopt on energy policy, taking up the stance of the producer nation which will not be bullied by the consuming nations into surrendering any control of national wealth or heritage. It is legitimate for Ministers to stand up for our national interest, but we have to see both sides of the coin and realise that what is sauce for the goose is sauce for the gander. If we are to criticise the French for protecting their agricultural producers, we cannot automatically assume that our Community partners will think that it is legitimate for us to be tough on our own behalf as energy producers.
I should like to deal with certain points that emerge from the White Paper. I agree with my hon. Friend the Member for Eton and Slough (Miss Lestor) about

the LoméConvention. I emphasise strongly, and I am sure that most of the House is with me on this, the importance of incorporating into the Community's aid arrangements the impoverished nations of Southern Asia. Until we do that, we cannot legitimately say that our aid programme is as extensive as it should be.
I am concerned about the discussion on political qualifications. I yield to no one in my belief that one must be severely critical about regimes which slaughter their own citizens. But we are in a dangerous position here when we start to try to draw a line about who should receive our aid. Will it be simply those nations which are engaged in massive repression, such as murder, that should be excluded? One can think of at least one such nation in Africa. Should such nations be excluded from the Loméarrangements? Or do we go a step further and say that we will not accept dictatorial regimes which, while not openly brutal and oppressive, have political systems of which we do not approve? Or do we say, because there is a logical progression in this, that a nation whose rulers waste resources and are, therefore, likely to use any aid resources purely to prop up their regimes should not receive our aid? The Emperor Bokassa spent a vast amount of money on his coronation. Would we say that that kind of waste of resources would exclude a nation from any Lométype agreements?
We face some tricky problems here, and, while I do not by any means decry the sentiments behind the idea of bearing human rights considerations in mind when giving aid, we must be wary of the paths down which that attitude takes us. We might find ourselves with very few nations we, in our European way, think legitimate for the giving of Community aid.
As for political co-operation, it seemed unfortunate that there was no specific mention of the Horn of Africa. That is an issue on which the European nations have all severally expressed their concern, as have the Americans. However, there seems to be no concerted attempt to get any agreement with the Russians. This is an instance where the Community, specifically because it has not put any arms into Somalia, has a right to speak to the Russians.
I shall spend rather more time on our trading policy, and especially to discuss the paragraphs in the White Paper on the Multi-Fibre Arrangement and on trade with Japan. As a Member who has textile firms in his constituency, it appears to me that there is no question but that the United Kingdom textile industry has suffered tremendous body blows over the decades—not merely the past few years—as a result of competition from cheaper foreign suppliers, especially in the Third world.
One of the reasons for our allowing that to happen, much to the anguish of our citizens working in the industry, has been the realisation that must come to all of us in the developed world that, if we do not move aside from some industries, it will not be possible for Third world countries to support themselves. That is because they will not be able to sell to us the things they can manufacture, textiles being par excellence the sort of item that they can start by manufacturing.
Now, when talking about steel the Minister of State said that when we take a Community decision it must not be an across-the-board decision but one that takes account of the differing circumstances of the differing steel industries in each member country. I ask my hon. Friend the Under-Secretary of State, who is to reply, why that should not apply to the Multi-Fibre Arrangement. Why do we not adopt that approach instead of using the enormous weight of the greatest trading bloc in the world, as we repeatedly remind ourselves, against a small British colony such as Hong Kong and clobbering it out of the blue—for the Hong Kong Government were not aware of the extent of the measures that Her Majesty's Government were about to take in concert with their European partners? Should we not consider first the situation facing the textile industries in the other member countries? I am reliably informed that if we did so we would find that their textile industries have not suffered nearly as much as our industry from foreign competition.
Our textile industry has been allowed to be far more open to foreign competition than have the textile industries of most of the other countries of the Community. If that were found to be true, surely the more sensible way to organise a Multi-Fibre Arrangement, thinking in

terms of the general objective of helping Third world countries, would be to try to open some of the other Community countries more widely to textile imports rather than to take shelter behind the Community trading bloc because we justifiably feel that we need protection.
That approach should also apply in our relations with Japan. I applaud the evident concern that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs shows to the need to maintain good relations with Japan. Despite what I believe to be the over-abrasive remarks sometimes made by my right hon. Friend the Secretary of State for Trade, I believe that that is the consistent attitude of the Government. It is vital that the sort of division between Europe and America on the one hand and between Japan on the other that opened up in the 1920s and 1930s must be prevented from happening again.
I do not want to draw dismal conclusions as to what might result from such a division. I merely say that it is vital that the relationship that has been cultivated over the past 30 years between Japan and Europe and Japan and America be preserved. Therefore, in our negotiations with Japan we must not say "My goodness, we are in severe trouble in Britain"—obviously we are—"in cars, electronics and other sectors. Let us get behind the Community blunderbuss and clobber the Japanese, or threaten them that they will be clobbered if we choose to protect ourselves in that way."
We must take into account that the Japanese have built up their industrial strength through hard work, enterprise, diligence and the study of our market. At the same time, we must note that their markets are not nearly as open to us as they should be. I made a speech over a year ago criticising the Japanese on that score. Nevertheless, we have to accept that a major reason for our failure to compete lies with us and not with some Mephistophelean Japanese plot.
If we take cars as an example, we must look around the rest of the Community before we tell our friends in the Community that we must protect ourselves from Japanese cars. As with textiles in the Third world, so with cars and the Japanese. I am reliably informed


that it will be found that the British market—unfortunately from our point of view—has for all sorts of reasons been far more open, partly because we play the game, to Japanese car imports than those of many of our Community partners.
Before we go to Brussels saying "Let us take the big stick to the Japanese", let us see first whether the French and the Italians, for instance, are allowing in Japanese cars, or other imports, in the same way as we do in Britain. If we adopted that approach, it may be that we would be able to shift the burden somewhat from Britain. We would, therefore, be less anxious to try to stop the Japanese exporting to us as they do at present, with all the implications that that has for possible protectionism in world trade.
I turn to enlargement, on which a number of hon. Members have dwelt. My hon. Friend the Member for Crewe (Mrs. Dunwoody) said that we should all welcome accession of the three applicants. She said that we should do so immediately. I tend to agree with the hon. Member for Lancaster (Mrs. Kellett-Bowman), who said that it is better to work out the problems first. However, we should all agree that accession is desirable, especially to help the nascent democracies, the new democracies, to strengthen their political institutions. As a consequence, it is right for those of us who are pro-European to say to those who have not even now accepted the verdict of the referendum—I except, for example, my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who has all along said that he has accepted it—that we cannot say to the Portuguese, the Spaniards and the Greeks "Come on in now. We believe that we can help you strengthen your democracies" if it is still our intention to pull out.
If one of the things that we are able to give the Community is our commitment to democracy and our knowledge of how in open debate across the Floor of the House to strengthen democratic institutions, the last thing we can do is to bring in those three nations only to say "Bye, bye, we have had enough. We are opting out." That would be a total negation of the role that we can play in Europe.
I have always been strongly in favour of the entry of the Spanish and the Portuguese. I have been doubtful about Greek entry. I shall not go into detail about that as I have talked about it in the past. I emphasise that it is not worth our talking about protecting democracy in those countries in an airy-fairy way, the idea being that by clinging to the skirt-tails of the Nine in some way the nations of Spain, Portugal and Greece will be protected.
One of the reasons that allowed us to help Portugal, in 1975 when it was at a difficult stage in its political progression out of dictatorship, preserve its democratic institutions, was that it was at the tip of Western Europe, surrounded by Western European nations. It was because it was a member of NATO and because we had the economic clout to help it.
I am a little concerned because the factors that apply to Portugal do not apply to Greece in the same degree. It seems to me that if Greece is to come in, if Portugal is to come in and if we are to help preserve their democracies, it is far from being a development that is likely to weaken the Community, which is likely to strain the bonds. It must be used, and it will be used if everyone is sincere in his declared aim, as a means of strengthening the bonds of the Community. Only if we can grapple Portugal, Spain and Greece to us with bonds of iron shall we be able to protect them from, if you like, themselves. Indeed, that is what they say themselves. That is what Mr. Karamanlis of Greece has said. They say "We want your help to protect us from the possible erosion of democracy in Greece and elsewhere." But we shall be able to do that only if we allow them to come closer to us than we are to each other at the moment.
I see the development and expansion of the Community not as a weakening force but as a strengthening force.

Mr. Russell Johnston: I have no doubt that the hon. Member sees it that way, but, unfortunately, others see it in a different light.

Mr. MacFarquhar: There are certain hon. Members who do. What I am trying to say is not merely an expression of idealism, but I am also trying, as my hon. Friend the Member for
Kingston


upon Hull, East tried to do in a different context, to look at the logic of events. I am not saying that I hope we shall do this, but that if we are sincere this is what will happen.
Many hon. Members are concerned about the development of Euro-Communism in the Community. It is likely that it will be a far greater threat if it is the political system in one member State of an organisation which comprises nine States than it will be if it is an expression of politics in one area of the European arena. If it is to be contained, it will have to be contained in a bigger political group. For instance, Italy on its own would not be able to contain it within its own system.
Unlike my hon. Friend the Member for Kingston upon Hull, East, I believe that the logic of political events is towards unity and that the logic of economic events is also towards unity. Despite the most massive trade recession that we have had in the last 40 years, instead of the old protectionism, the Community countries have managed to keep together. This is a striking example of the importance of the links that are already formed and of the likely development—namely, the strengthening rather than the weakening of those links.
Some hon. Members have talked about the development of the Regional Fund and the need for larger funds for aid under the LoméConvention. If we are to have a larger budget—both pro-Europeans and anti-Europeans would probably welcome that—it is likely to lead to greater unity. That is because the more money that there is to fight over, the more important it will be that it is not distributed by straight national bargaining arrangements. The more money that there is, the more tightly organised will have to be the institutions that will decide how it is to be split up.
I am not a closed federalist—I am an open federalist—but I would not wish to say that I think that the immediate logic of the developments that I have outlined is a one-way street to federalism. As I tried to indicate when analysing Britain's psychological adjustment to the Community, I have always tried to take the long view of the logic of events. This points towards increasing unity. It will take a long time. The developments discussed

in the White Paper and in some of the speeches point us inevitably in the direction of closer unity. I hope and believe that this Government will welcome that direction.

8.24 p.m.

Mr. John Wells: I welcome the White Paper because I believe that it indicates to many people with many sectional interests the continuing useful work being done by Community institutions on behalf of the citizens of the entire Community.
The hon. Member for Belper (Mr. MacFarquhar) spoke broadly, but he spoke with particular authority about textile matters, which are obviously dear to his constituents. There is something in the White Paper for every hon. Member from every type of constituency. I hope that the House will forgive me if I address myself briefly to three matters which impinge directly not only on my constituency but on the whole county of Kent.
First, I am sorry that in section VII, which deals with transport and the environment, there is no mention of current Community thinking on the revised plans for the Channel Tunnel. The Chunnel is not dead by any means. There are two prospects open to us—to use the single pilot tunnel and put through trains in batches or to go the whole hog for the tunnel as it was originally envisaged.
It is a pity that this important White Paper does not tell the nation frankly that that prospect is still open and that perhaps it could be done with Community and European money rather than our having to go, begging bowl in hand, round the world for finance. I believe that we should go all out for the original three-tunnel tunnel rather than for the single pipe tunnel. I deplore that there is no mention of that. I realise that an attempt has been made to make the White Paper as concise and readable as possible so that it will have a wide readership.
I turn to the subject of enlargement. I agree with everything that the hon. Member for Belper said about it. I shall direct the attention of the House to Spain. I must declare an interest as an officer of the Anglo-Spanish all-party group in the House. I believe that the friends of Spain in this country are anxious that Spain should attain full membership at an early opportunity.
I now turn back on myself. I represent a prominent horticultural constituency which is set in an area of horticultural growing. When a new country accedes to the Community, the horticultural produce pushes all the way up through Europe. If Spain comes in, the peaches will impinge upon the apples and the apples will impinge upon the pears. The whole thing works its way up from the South with a warm climate to the North with the climate that we have recently experienced.
One must have anxieties. There is still a massive structural surplus of tree fruit in Europe. I use the phrase "tree fruit" although it is not the usual phrase. One usually talks of top fruit, or hard fruit. I refer to the fruits that grow on trees, which take several years to establish and to come into bearing. Generally it takes a massive Government subsidy at some stage to get them going. Is it not absurd that there should be a Government subsidy to get the growers out of the industry?
Without wanting to digress for too long, I must say that we all know that Madame de Gaulle was a great believer in sobriety, and we also know that General de Gaulle was a great believer in good wine. Therefore, the de Gaulles, husband and wife, hand in hand, were very anxious to grub up the excess of bad vines in France so that quality should be improved and quantity reduced. The net result was that vine growers who knew no other way of earning a living except in horticulture went to something else that had a nice ready sale. They planted peaches. Chaps growing peaches planted pears, and the chaps growing pears planted apples, so this whole crazy process of pushing up, as it were, all took place because of Madame de Gaulle's sobriety.
That may seem quite ridiculous, but it is true. I just fear lest in encouraging new countries into the Community we shall have a repetition of the structural surplus to which the sobriety of the good lady led a few years ago.
I am glad to see in paragraph 38 of the document, in the agriculture section, that the Council has begun an examination of the problems of the Mediterranean agricultural position. But Mediterranean agriculture is a sort of euphemism for

horticulture—smallholdings, small acreages; I do not speak metric yet—growing almost entirely horticultural produce. Therefore, it would have been nice had this report enabled us to know rather more about the thinking behind paragraph 38.
However, as a horticulturist I get comfort from paragraph 39. That is the paragraph that draws our attention to the fact that the Community is now allowing in greater quantities of apples from third countries because of the present scarcity of Community-grown apples. This must be good because it means that the British housewife is assured of a continuity of supply of apples at reasonable prices. To my mind, that is exactly what the control of fruit is about—that there should be continuity of supply, at reasonable prices, all through.
When the European, and particularly the British, crop comes on to the market next autumn, these Southern Hemisphere fruits will be restricted again. This is a most admirable situation. I hope that it will long continue, year by year, when we have a shortage that should be made up. However, I am fearful lest it becomes a habit in areas where we have a surplus. It would be terrifying if we had our cold stores full and an excess of fruit was allowed in.
I am glad to be able to remind the House that as long ago as 1976 the Worshipful Company of Fruiterers sponsored a lecture by a distinguished South African academic, pointing out the place of Southern Hemisphere fruit within the consumption of the Community, so people all around the world are realising the importance of continuity of supply.
The third Kentish point to which I want to turn is to say how sorry I am that in section V there is no mention of the dumping situation in paper. The hon. Member for Belper and other hon. Members have spoken about textiles, but the House must realise that hon. Members who have paper-making mills in their constituencies, and in particular those who have mills making soft tissues, are suffering very considerably at present from Spanish dumping. I believe that the authorities in Brussels are somewhat dragging their feet about this. I should have been a happier man had there been a paragraph indicating the Commission's


attitude to the dumping of paper produced by third countries.
Having spoken earlier in favour of Spain's accession, I might be thought to be somewhat quaint to start complaining about dumping, but it is dumping in the accepted sense that it is coming into this country and other Community countries with a Government subsidy, as I understand it, from Spain, whereas if Spain becomes a full member of the Community, any Spanish Government subsidy would immediately be questioned very much more quickly and more easily than in the present circumstances.
To summarise these three Kentish points, as it were, I conclude by saying that they are, first, that I deplore the lack of mention of the Chunnel; secondly, that I welcome the all-round-the-year apple, though I hope that we shall tread steadily about too much top fruit; and, finally, that the dumping of soft tissue causes considerable anxiety in a number of Kentish constituencies.

8.35 p.m.

Mr. James Scott-Hopkins: Certainly the House cannot complain about the time that the Leader of the House has given us on this occasion for a debate on Europe. Previously such debates have come late at night. I am glad that the time of debate has been changed so that we have an afternoon and evening for the discussion, but the attendance in the House, I am afraid, shows the amount of interest in the European scene. I deeply regret this, because from the speeches we have heard during this debate and from the White Paper it is clear that the Community's decisions, affecting all aspects of life, are important to everybody; and hon. Members have raised many points of great importance to the citizens of this country. I am only sorry that more hon. and right hon. Members have not been able to spare time to attend and take part in this debate.
I agree with the hon. Members for Fife, Central (Mr. Hamilton) and Inverness (Mr. Johnston) that there is no doubt that during the last six months to which this report refers we as a country have not done particularly well. Looking back, it has been a depressing six months. Although the Minister of State ran through a catalogue of achievements coming out of various meetings of the Council

of Ministers, it was a pretty drab and sad catalogue. The hon. Member for Fife, Central, to whose courage I take off my hat—I pay tribute to him for his Europeanism—was right to say that we have not done very well in Europe over the past two and a half years, and particularly during the six months to which this White Paper refers.
It would be wrong to go into the details of the various meetings of the Council of Ministers at which it has been a United Kingdom Minister who has held up matters and stalled. We cannot go into the European Community with the one idea of taking everything out and putting nothing in. There has to be a two-way flow. As a country we have done remarkably well from the European Community over the rather more than five years during which we have been a member. As my hon. Friend the Member for Harwich (Mr. Ridsdale) said, we have done much better than we thought we would, and, although in 1977 there has been a net contribution of £100 million, that has been far less than we had thought it would be, and it has been greatly to the advantage of this country. Like many of my hon. Friends, I regret what has taken place in these six months.
Two or three strands have run through this debate. The first, mentioned by the hon. Member for Kingston upon Hull, East (Mr. Prescott), concerned import controls. My hon. Friend the Member for Mid-Oxon (Mr. Hurd) spoke of it in his opening speech. There has been anxiety within the Community, and certainly among the trading partners in it, as to its present attitude. Are we, as nine countries, becoming more protectionist in outlook than we have been in the past? Are we reverting to what we used to accuse the Community of being before we joined it—being inward looking? There is among some of our trading partners a feeling that this is the way we are going. This has arisen perhaps from the various debates of which they have heard in which views were expressed concerning the likely protection of steel.
Interesting comments have been made concerning the penetration of Japan into markets, not only in the United Kingdom but in Europe, in respect of cars and electronics. This penetration has been considerable. I do not, by the way, agree


with the hon. Member for Belper (Mr. MacFarquhar) that if we start questioning other European countries to discover whether they have been as liberal as we have been in accepting Japanese cars into our country, and, when we find that they have not, ask them to liberalise to the same extent as us we shall find that the import of Japanese cars into this country will decrease. I do not think that that will happen. I believe that there will simply be an increase in exports of Japanese cars to other European countries.

Mr. MacFarquhar: But does not the hon. Gentleman agree that the sometimes almost hysterical atmosphere on protectionism that seems to be developing in Europe in regard to Japan would be considerably eased, at least in this country, if the burden of Japanese exports to Europe were more equally shared?

Mr. Scott-Hopkins: That is true in principle. It will be regrettable if Europe becomes more protectionist than she is now. But it is equally fair to say that the penetration of not only United Kingdom but European goods into the Japanese market has been severely restricted by internal Japanese legislation.

Mr. MacFarquhar: I said that.

Mr. Scott-Hopkins: I agree that the hon. Gentleman said it. It is a fact of life. Until the Japanese are prepared to be more accommodating in this respect, it is hard to ask manufacturers and traders in this country and the whole Community to adopt a liberal attitude towards the penetration of our market, though in principle it must be right. We do not want the European Community to become inward looking, but there have been great arguments for taking short-term measures to deal with the problems which have become acute in particular areas of industry, such as steel.
The Community showed its attitude clearly in the Multi-Fibre Arrangement, which was the result of a great deal of hard work. We debated it in the European Parliament last year when we had before us a very good document produced by my hon. Friend the Member for Cheadle (Mr. Normanton). As a reference document it was one of the best I have seen. Negotiations took place on

the MFA. The hon. Member for Belper is wrong to say that we suddenly clobbered the Hong Kong Government. They knew that it was coming. They knew that exports from Hong Kong at their level of prices were bound to cause problems throughout Europe and particularly the United Kingdom, not only in the hon. Gentleman's constituency but in mine. These problems have arisen over the past months and years. I hone that the MFA will go some way towards easing them.
I was in partial agreement with the hon. Member for Kingston upon Hull, East when he talked about a new international order. He spoke of overcapacity of production and under-capacity of consumption throughout the Western world. That is not the position over the whole developing world, but it is undoubtedly so in the Western industrialised world, and it results in unemployment there. Therefore, new types of trading arrangements must be made. New systems and methods must be worked out.
The Community's attitude has progressed since the White Paper was written as regards the GATT negotiations, which is where I hope the majority of the negotiations will take place. It is important for the Community to play its full part as one of the biggest trading blocs in the Western world. There will undoubtedly be a rearrangement, but I trust not a sharing out of markets, not a complete stifling of free enterprise. That would be the wrong approach.
I think that the large trading areas will have to arrive much more quickly at better arrangements. I am greatly worried at the very slow progress being made in the various negotiating committees of GATT in Geneva. Perhaps the Under-Secretary of State, when he replies, will give a short resumé of the position as he sees it at the moment. It is in the negotiations in GATT and in the liberalisation of world trade that we should be able to see some hope for the future.
The hon. Member for Eton and Slough (Miss Lestor) touched on the developing countries and the renegotiation of the Lomé Convention. I take the point made by the hon. Member for Belper. I am not all that sure that we can write too rigid a clause into any renegotiated Lomé


Convention to the effect that this or that practice must be observed, and specifying human rights. Obviously, one is trying to write human rights into this sort of agreement, otherwise these countries would not be allowed to have associated status and aid would not be granted to them. There must be, I believe, a clause dealing with the wide general acceptance of human rights by the receiving countries. Unless they are prepared to observe what is set out in a clause of that sort, we should be prepared to help only the people themselves in those countries, as I think the Minister of State put it, and should not support the Governments.
Many of the non-associated countries, particularly in South-East Asia, are part of the Association of South-East Asian Nations. The Community is in negotiation with ASEAN. The negotiations were started by Sir Christopher Soames two years ago. They are still continuing, and assistance is being given to the ASEAN countries along the same sort of lines as assistance is given to South American States.
My hon. Friend the Member for Mid-Oxon spoke about the enlargement of the Community. Yesterday at Question Time I asked the Foreign Secretary for his view about the progress being made in the negotiations with Spain, Greece and Portugal for their admission to the Community. It appears that there is no urgency behind the negotiations, although they have now gone beyond the stage of the Commission. The White Paper mentions the negotiations, but, as far as I can see, no real progress has been made in the last few months. Indeed, only last week a Greek delegation went to Strasbourg to meet as many parliamentarians as possible and to plead for added urgency to be given to the negotiations.
I have always said that we must not proceed too fast, and that we must make quite certain that all the issues are understood, and the basic problems properly dealt with, before final agreement is reached. Nevertheless, it would be helpful if we could have some form of programme put before us. Is it possible that Greece will be able to sign with the Community by the beginning of 1979, or is it likely to be June 1979, or even 1980? That is quite apart from the transitional period, of course. I

gather that the Commission has been asked to prepare its initial report in regard to Spain and Portugal but that it will not be ready for the next few months, perhaps not until after the Summer Recess. Will the Under-Secretary of State confirm that impression or otherwise?
I sincerely hope that no actions will be taken which will in any way lead to Spain and Portugal thinking for one moment that the Community wishes in any way to delay or hold up the entry of Spain and Portugal once the processes have been gone through. I hope also that nothing that Her Majesty's Government say or do will give any such impression. From their point of view, and from Europe's point of view, it is absolutely essential that they should join.
I am very much of the view that the Community must move forward. I take the line of the hon. Member for Belper, that the accession of three other countries south of the Community, in view of the precarious situation of democracy in which they find themselves—and, I hope that they will never cease to be democracies—can only be good for the Community and can only strengthen its bonds.
I hope we shall not stop there. I hope that the countries of Scandinavia will before long review their situation and apply for membership. I hope that all the countries of Western Europe will want to join and will be accepted by the Community in the years ahead. I believe that that would give a dynamism to the growth of Europe.
I must confess that I am not a con-federalist. I do not believe that the logic of events moves that way. I do not believe that a Europe of separate States can continue. The whole logic of European events means that we must move closer together, small steps at a time. Perhaps this year there will be some movement in elementary monetary union. Perhaps later there will be further steps towards further economic integration. Perhaps the year after there will be more political integration and co-operation.
Contrary to what the hon. Member for Kingston upon Hull, East said, I believe that the logic of events in Europe is that we have a new generation of young people who do not wish the old barriers of my youth to remain. I believe they


want Europe to move closer together. What we are now doing is slowly building the ground floor brick by brick. It will be the job of those young people in the years ahead to add further bricks to the first floor, and other floors above that. What we are doing is right.
But it must be done pragmatically and slowly, step by step. We cannot go back. If we try to remain as a Europe of separate countries, we shall disintegrate as a community and we shall be a very loose free trading area. We shall be picked off one by one by those who are not friendly towards us. I see no future in that, either for my generation or for the generation of people coming after me.
It is odd that no hon. Member my hon. Friend the Member for Harrow, East (Mr. Dykes) merely touched upon it—mentioned the budget, which was one of the most important events of the six-month period. I refer to the budget for 1978, which was finalised with the Council in December. As always, it is never enough. Various hon. Members have said that the Regional Fund was not big enough or that the Social Fund was not big enough, but the people who have stopped that have been Labour Members and Ministers in the Council of Ministers. We have always asked for more with regard to the Regional Fund, but the blockage point has always been in the Council of Ministers. I do not know whether it is because the Council of Ministers is frightened of what it is doing.
It was refreshing to hear the hon. Member for Fife, Central underline and illustrate exactly how this country and his own constituency have benefited from the various funds, but he will admit, as I do, that they are much too small. We have to be much bolder in our approach. There has been an increase in this year's budget. The Regional Fund has been increased, but to nothing like the level that it should be, and the reason is temerity on the part of Ministers. What they are frightened of, I do not know.
In the years when Lord Thomson was the Commissioner in charge, the reply always was that the Commission did not know how to spend the money, so there was no point in voting more because the Commission could not get rid of it. But that is not the position now, given the levels of unemployment in the countries

of the member States, the imbalance in the Community, and the deprived areas. There is no problem in finding candidates for the money if only Finance Ministers will have the courage to vote it Enormous good can be done, and the hon. Member who said that it was for the Community to do it rather than national Governments was thinking along the right lines. It is also the logic of being in the Community that, to an increasing extent, the Community should take over this type of work and expenditure. I do not know whether the Council of Ministers will have second thoughts. I very much hope so.

Mr. Russell Johnston: Representing the Conservative Party, is the hon. Member saying that he thinks it would be a good idea to have a quota-free element in the Regional Fund?

Mr. Scott-Hopkins: I am sure that the hon. Member has seen the pamphlet that I have written on this subject. I believe that the Regional Fund should be incorporated into what might loosely be called a rural fund involving not only the Regional Fund but the Social Fund and the guidance section of the CAP. If that was done, leading to development of the backward regions and help for the deprived areas, there would be no problem. But that is always assuming that there is enough money in such a fund. If there is, it can be done.
In the coming three months—the remaining period of the Presidency of Denmark—it is hoped that Her Majesty's Government will do better. I hesitate to mention the Minister of Agriculture, Fisheries and Food, who has a great deal of work to do. I wish him well in the negotiations on fishing which lie ahead of him. Let him remember not only that it is the British interest which is of importance but that we are a member of the Community. There is no question of our leaving it, so agreement has to be reached. I do not think that the right hon. Gentleman will have all that much difficulty in the negotiations, because our position is fully understood by our colleagues in the other countries of the Nine.
I also wish the Minister well in his negotiations on the price review which are taking place at the moment. But here he has a more difficult position to


defend. He has offended almost everyone in the Council of Ministers of Agriculture. He has shown the most astonishing clumsiness. I believe that it was quite unnecessary for his demand for a 71½ per cent. devaluation of the green pound to have been refused. The way that it was done by the Minister who did it unhappily made it inevitable. But it need not have happened that way at all. If the Minister had been a little more flexible and a little less clumsy in the months preceding it, it would not have happened. He wants a great deal for the British farmer, though I shall not bother the House by detailing it. He wants a lot and he has very little to give. He certainly has no room to manoeuvre. It will be a difficult job.
The right hon. Gentleman is a clever man. I am sorry that he is not here, because I do not like saying things about him in his absence, but I know that the Under-Secretary is more than able to defend him. Although the right hon. Gentleman is a clever man, he will find it difficult to get what is absolutely essential for British farmers, bearing in mind the necessity to hold down the level of the price review this year to roughly what it was last year, if possible a little less. It will not be easy and I wish the right hon. Gentleman well on behalf of this country. Let us hope that all Ministers, when they go to their respective Councils, will bear in mind not only the interests of the United Kingdom but the interests of Europe and the honour of this country.

9.0 p.m.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. John Tomlinson): I shall not pretend that this has been either a stimulating or enjoyable debate. It has been a wide-ranging one, dealing with British relations with the Community. There have been a vast number of issues raised, which has inevitably deprived the debate of coherence. This cannot be avoided when we try to review in one debate the work of the Community over the past six months.
Before I reply to some of the substantive points that have been raised I must deal with the comments of the hon. Member for Derbyshire, West (Mr. Scott-Hopkins), who castigated the Minister of Agriculture, speaking of his alleged

clumsiness. The hon. Member told us what he wants for British farmers in respect of the green pound devaluation. Such comments come ill from his lips, since it was he and his hon. Friends who forced the current situation upon the Minister. It is a matter of great regret that the hon. Gentlemen should seek to personalise the present situation in the agricultural Council.

Mr. Scott-Hopkins: I stand by everything I have said. I and many of my hon. Friends tried to make the Minister of Agriculture devalue by 5 per cent. in the autumn of 1976 and at the same time renegotiate the MCAs for pigmeat. If he had done so then, he would have succeeded. Europe was sympathetic to us in those days. Because the right hon. Gentleman did not act then, the situation grew worse until we were forced to do what we did.

Mr. Tomlinson: I do not find the fact that the hon. Member was trying to force a mistake upon my right hon. Friend in 1976 any justification for his seeking to impose an even worse mistake upon him this year.
I turn to the comments of the hon. Member for Mid-Oxon (Mr. Hurd). I was sorry that, compared with previous debates on the state of the Community, the hon. Member's remarks should have been so much more negative than usual. The first half of his speech castigated those of my right hon. and hon. Friends who are opposed to our membership of the Community. Those who fall into that category and who have participated in this debate have expressed reservations about the Community in a constructive way. That is to their credit. It is a negative approach to castigate those who express honest and sincere views. It is a negation of the constructive spirit in which we should like to approach such a debate.
The hon. Member for Mid-Oxon criticised the Government for their handling of Community business. I shall deal with that later. Together with his other hon. Friends, he mounted a well-orchestrated campaign against the Minister of Agriculture. The hon. Gentleman asked about New Zealand access. At the September meeting of the Council of Ministers my right hon. Friend succeeded in securing a further increase in the cif


prices that New Zealand gets for her exports of butter and cheese to the United Kingdom. This increase, the third achieved by the Government, brings prices up to a level 53 per cent. higher than those originally agreed under protocol 18 to the Treaty of Accession. In this way we have been able to enhance the benefit to New Zealand of the special arrangements for her produce without entailing any increase in retail prices on this account. We are determined to stand by all the commitments to New Zealand. There is no reason for anyone in the House to doubt that assurance.
There are as yet no formal proposals on the table for an EEC sheepmeat regime. We expect proposals very shortly, and we shall look closely at them from a number of angles. As the Minister of Agriculture has stressed on many occasions, one of the basic essentials from our point of view is that such a regime must assure adequate access for imports from New Zealand and other third countries.
The hon. Member also raised the question of a possible declaration about democracy. There is agreement among Foreign Minister that such a declaration should be issued at an appropriate moment and that moment might be at the time of the decision on the date of direct elections. The European Council is expected to consider this at its next meeting on 7th-8th April and preparatory work has been begun on that already.
The hon. Member spoke of the question of fewer languages in the Community. I do not think that we can rightly expect any country to give up its language for formal purposes. All official community documents have to be distributed in each member State and sometimes these have legal effect. However, it might be possible to cut down the number of languages used for working purpose.
On the point about Commission procedures, there will be a need to devise a better decision-making structure. The Government doubt whether greater recourse to formal voting in the Council will contribute to greater efficiency. The Council already operates on the basis of informal majority decision-taking, and in matters of great interest to member States the Government believe that discussions

should continue until a consensus is reached.

Mr. Russell Johnston: Will the Minister clarify what he said about languages? He said that for formal purposes the Government would not wish to take any strong view on the matter but they hoped to see a cutting down of languages for business purposes. Does that mean action in regard to applicant countries, as well as the existing six languages used?

Mr. Tomlinson: The hon. Member has clarified it perfectly in his latter assumption.

Mr. Dykes: Will the Minister say how the Government would react to the idea that the Council should deliberate more openly in public, especially when legislating rather than negotiating?

Mr. Tomlinson: I can comment on that intervention only at the expense of other matters on which hon. Members wanted assurance.
The enlargement of the Community was mentioned by the hon. Members for Mid-Oxon, for Inverness (Mr. Johnston), for Lancaster (Mrs. Kellett-Bowman), my hon. Friend the Member for Belper (Mr. MacFarquhar) and the hon. Member for Derbyshire, West. The Government's view is that enlargement is the greatest issue facing the Community at present.
We warmly support the applications from Greece, Portugal and Spain. Enlargement from nine members to 12 is crucially important in order to buttress democracy in these countries. Enlargement will lead to problems that will take time to solve, but the political gains greatly outweigh the potential costs.
I was asked about the specific applications for accession. Substantive negotiations with the Greeks began on 10th February. In the sectoral approach agreed for the negotiations discussions on the first mandate for an industrial customs union are well under way. Mandates for other sectors will be discussed shortly. The Government hope that it will be possible to complete negotiations by the end of the year, as the Greeks want.
The Commission's opinion of the Portuguese application is expected in April. There will be further exploratory exchanges with the Portuguese followed by


the preparation of the Community's mandate for the substantive negotiation. It is impossible at present to foresee the precise timetable.
The Spanish application was referred to by the hon. Member for Maidstone (Mr. Wells). The Commission's opinion is expected at the end of the year or early next year. The procedure will probably be the same as in the Greek and Portuguese cases. Once again it is impossible to predict how quickly matters will move forward.
The hon. Member for Inverness mentioned the cost of enlargement. It is premature to try to put a precise figure on the average costs. There will be budgetary costs, and there could be some extra costs if any of the applicant countries were to be given special help to bring their standard of living closer to that enjoyed in existing Community countries. At this stage it would be precipitate to try to forecast the cost.
I welcomed the speech made by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). I wish to take this opportunity to pay tribute to him for his contribution to the work of the Assembly in leading the Labour delegation. He made an interesting forecast about direct elections and the consequences of decisions on Greek membership. Time alone will tell, but I suspect that he may be proved wrong and that elections will take place.
My hon. Friend also referred to the subject of human rights. I heard my hon. Friend speak on this subject when he raised the question of human rights matters in the context of Lomé renegotiation at the joint EEC-ACP consultative assembly. The matter, which was also referred to by my hon. Friend the Member for Belper, was dealt with by that body and a resolution was passed signifying its acceptance that human rights issues should be discussed in the Lomé renegotiations.
However, I must point out that the ACP ministerial council meeting held in Lusaka last December passed a contrary resolution deploring any attempt to tackle human rights issues in the context of the Lomé renegotiation. Discussion with the Community on a renegotiated mandate is just beginning, and the Commission's proposals are being studied by

the Government. It is too soon to go into detail about the position, but I think that it is right to say that we should like to see improvements in the new convention. These improvements will need to include provision for the suspending of aid to States in which there are gross and persistent abuses of human rights.
When dealing with the matter of industrial policy my hon. Friend the Member for Kingston upon Hull, East referred to one or two sectors. On the subject of steel, I wish to point out that the Commission, in consultation with member States, has continued to take measures to combat the effects of the world steel recession which all steel-producing countries in the EEC are feeling. Guidance on prices and deliveries within the Common Market have been given a mandatory basis in respect of certain provisions. This includes antidumping action against products entering the Community at abnormally low prices.
I must tell the hon. Member for Maid-stone that I can give him no assurance that similar action is being taken on matters of concern to the men of Kent involving imports of paper from Spain.
To guard against disruptive imports from third countries, the Council has approved a mandate for negotiations in principle in regard to countries that supply steel to the Community. The purpose of such agreements, involving price discipline and assurances about quantities, is to restore order to the steel market.
In the meantime—and here I refer to the speech of my hon. Friend the Member for Fife, Central (Mr. Hamilton)—I believe that we shall continue to benefit from the arrangements with the European Coal and Steel Community. A figure of £32·3 million was approved for the United Kingdom steel industry in the second half of 1977.
I wish to mention the subject of shipbuilding—and I appreciate the validity of the contribution made by my hon. Friend the Member for Kingston upon Hull, East. Community co-operation in shipbuilding has shown itself in the OECD. The Community, speaking with one voice, has been able to impress on Japan the need not to lower prices, despite the appreciation of the yen, and to accept a


smaller market share than its competitive position might enable it to obtain.
All member States and the Commission are aware of the need to sustain a European shipbuilding industry through the present recession. The strategic and maritime interests of the United Kingdom and Europe make that position essential, but the necessary aid must be provided in such a way as to avoid wasteful competition. Hence the successive directives on aid to shipbuilding which have provided an agreed framework within which national aid schemes can be operated. Last year, our shipbuilding intervention fund of £65 million was highly successful in securing orders for the United Kingdom which otherwise would have gone to non-EEC yards.
Economic and monetary union has been raised by a number of hon. Members. On 5th and 6th December, the European Council considered proposals from the Commission for a five-year action programme towards economic and monetary union and directed that they should be studied further by Finance Ministers. The relevant specialist committees are examining the proopsals and will report to Ministers in due course. The United Kingdom attitude to specific proposals will have to be determined in the light of that study.
Our general position is well known. We recognise the importance of the economic dimension for the future of the Community, but believe, as has been stated by a number of hon. Members in the debate, that attention must be focused on the immediate obstacles to economic convergence.
I have been asked about the views of the President of the Commission, who has argued clearly his case for a leap forward towards monetary union if there is to be any real progress. Obviously, his arguments and the economic premises behind them need careful thought, but the United Kingdom view has always been that the practical foundations of economic convergence must be laid before there is any point in building the overall structures of union. As the Prime Minister said in the House on 7th December, our position is "Show me"—show us the practical benefits of monetary union to the United Kingdom and the whole of Europe in the present conditions of recession.

Sir A. Meyer: Will the hon. Gentleman give way?

Mr. Tomlinson: Oh, very well.

Sir A. Meyer: The hon. Gentleman need not be scratchy. He is among friends and enjoys the great admiration of hon. Members on both sides of the House.
Will he take this opportunity to put on the record something that it might be valuable to have on the record? Will he state categorically that there is no pre-judice in the Government against the Commission because it is headed by a distinguished former member of the Labour Party? There is sometimes the impression that there is a particular animus against the Commission because Mr. Roy Jenkins is at its head.

Mr. Tomlinson: That shows how mistaken I was to give way. That was a nonsensical suggestion which every hon. Member on this side of the House would repudiate.

Mr. Dykes: Why is the Minister being so vehement?

Mr. Tomlinson: Because I have had to waste the time of the House by reaffirming something which is clearly understood by everyone.
In an interesting speech, the hon. Member for Inverness criticised our pursuit of self interest. But which of the interests that British Ministers are pursuing would the hon. Gentleman have us drop? Should it have been the pursuit of the siting of JET, on which we were successful and which people who were not so articulate in supporting the stand of my right hon. Friend the Secretary of State for Energy have since been praising? Should we drop our stand on fishing, or our stand on regional policy and the important principles contained in it? Should we drop our attack on goods in the agricultural sector that are in regular structural surplus? Of course not.
I agree with the hon. Member for Inverness that we must have aims and future ideals, but I do not believe that we pursue the future best by denying the problems of serious interest to this country at present.
My hon. Friend the Member for Eton and Slough (Miss Lestor) raised interesting questions about scrutiny. The Government attach particular importance to


making improvements in the arrangements for scrutiny and debate of Community business. This undertaking was given in the Prime Minister's letter to the general secretary of the Labour Party on 30th December and reiterated to the House by the Lord President on 17th February. We note what my hon. Friend said about the example which worried her. The Leader of the House has given an undertaking to make proposals on parliamentary control of Community business.
My hon. Friend the Member for Belper asked about aid to non-associate countries. We are not satisfied with the allocation to non-associate countries, which was 45 million units of account in 1977 and 70 million units of account in 1978. We have many times made clear to our Community partners that we want to see a much more substantial programme of aid to non-associate countries. The two ad hoc annual programmes so far agreed were very small. They marked a beginning. It is now necessary to react to the pressure which has consistently come from this country to increase the sums involved. I am grateful to my hon. Friends for raising that question.
The hon. Member for Flint, West (Sir A. Meyer) made an interesting philosophical discourse, but I believe that his description of the relationship of the Commission to the Council and their job relation to the common agricultural policy as it evolves is one which I suspect will bring a wry smile to the face of my right hon. Friend the Minister of Agriculture, Fisheries and Food if he has time to read it. I do not agree with him about the need of the House to give growing powers to the Assembly and increased powers to the Commission. I reject the accusation that he made about the Government's tardiness in relation to direct elections. The House and those hon. Members who want to understand them have it within their comprehension to know exactly what the difficulties were.
As has been said, it would be well on occasions if those hon. Members who took such persistent joy in seeking to criticise the tardiness of the Government over one aspect of Community affairs were occasionally heard to raise their voices on questions such as the VAT Sixth Directive, on which we are one of the only two countries in the Community to have taken steps to ratify the legislation. I say to

those who are concerned about the speed of our involvement with Community matters that it has to be a two-sided process.
My hon. Friend the Member for Crewe (Mrs. Dunwoody) raised the question of the CAP and Mediterranean agriculture, which was also referred to by the hon. Member for Maidstone and on which the Commission submitted a package of proposals just before Christmas. We welcome the Commission's broad approach to the problems of Mediterrean agriculture and the problems contained therein are being studied with care.
My hon. Friend went on to talk about the pursuit of national interests. I agree with her entirely. There are nine States in the Community which all have national interests and which all pursue those national interests. I do not believe that we in this country should apologise for ensuring that the Community appreciates that there are areas of great domestic importance which need to be recognisd not only here but by our Community partners.
The general question of the common agricultural policy was referred to by my hon. Friend the Member for Crewe. I say to her, as the House will understand, that my right hon. Friend the Minister of Agriculture, Fisheries and Food has full support in pursuing the policy of the Government, which remains that the common agricultural policy needs radical change. We should like the Community to stop producing structural surpluses year after year. Our general aim is to move towards a policy that supports prices at the level needed for efficient producers and to bring about a balance of supply and demand to the benefit of consumers.
My hon. Friend the Member for Fife, Central referred to the importance of political co-operation. I readily acknowledge what he said. We have only to look at the range of subjects dealt with in political co-operation—for example, the co-ordination of policy for CSCE, the discussion on the Middle East, consideration of the problems of Africa, including Namibia, Rhodesia and discussion of the Horn of Africa, and the whole question of the United Nations and human rights. All these subjects have been fully dealt with in the confines of political co-operation. Experience has shown that the


collective weight of all Nine, when they are agreed on a particular issue, strengthens the hand of individual member States, including this country.
The hon. Member for Harrow, East (Mr. Dykes) quoted figures which were dangerously wrong when talking about the budget. It is grossly wrong for him to include in his figures loans from the various funds of the Community, as if there was a net budgetary advantage. The situation is quite clear. The Chief Secretary to the Treasury stated in a Written Answer on 12th January that the United Kingdom's estimated contribution to the 1978 budget in the light of the settlement reached at the European Council in December would be: gross contribution, £1,120 million, receipts £460 million—a net contribution of £660 million. That is greater than the estimate in the public expenditure White Paper where there was an estimated gross contribution of £640 million.
As the Prime Minister said in the House on 7th December, the United Kingdom contribution towards filling the budgetary gap that was left by the arrangements for implementing Article 131 would be about £40 million. The details of how to meet the residual gap will have to be agreed by the Finance Ministers in due course.
Details of the United Kingdom's receipts and contributions to the budget from accession to the end of the previous year were given by my right hon. Friend the Chief Secretary to the Treasury in a Written Answer to my hon. Friend the Member for Blaydon (Mr. Woof) on 20th January.
Two other questions were raised by the hon. Gentleman on capital movements. The adjustments to the United Kingdom system of exchange control that were announced at the end of last year following discussion with the Commission are limited measures applying in only certain areas. We have the Commission's authorisation to maintain our major controls on exchange flows for a further year up to 31st December 1978. This is a necessary precaution for our balance of payments and for our economy generally.
As for the Community borrowing scheme, it is well known, following the European Council's approval in prin-

ciple for the establishment of a new Community borrowing scheme, that the Commission has put to member States a draft Council decision that would give the scheme a legal basis. The text has now been considered by the Finance Ministers. As is mentioned in paragraph 51 of the White Paper, the scheme would involve the Commission borrowing up to 1,000 million European units of account, which would be on-lent to assist industrial investment in member States. The appraisal of projects and on-lending would be managed by the European Investment Bank. The United Kingdom aim will be to find ways of working the scheme that are efficient and straight-forward in administrative terms and that make a real contribution to present economic needs. We would expect to see some benefit ourselves from the operation of the Community borrowing scheme.
Finally, there is the question of Soviet fishing. Reciprocal fishing arrangements with the Soviet Union ended in September 1977 after the Russians had tried to impose unacceptable restrictions on Community fishing in their waters. It remains the Community's objective to negotiate a reasonable reciprocal fishing arrangement with the Soviet Union, but there seems little immediate prospect of a resumption of negotiations. However, there are no Soviet vessels fishing in breach of the position that I have explained. The only vessels involved are those that are legitimately purchasing catches.
I turn to the interesting speech of my hon. Friend the Member for Belper. I refer to two aspects of it, the Multi-Fibre Arrangement and Japan. In 1975 all sectors of the textile and clothing industry faced a recession that has been described as the most serious since 1931. The trade deficit on textiles in the United Kingdom was £220 million, about 5 per cent. of our total trade deficit. There was a serious risk in 1976–77 that the industry might emerge from the recession not only reduced in size and capacity but so disrupted that it could no longer be expected to be competitive in world markets. Jobs were being lost. It is estimated that about 100,000 jobs were lost between 1973 and 1977.
The eight most sensitive products that make up 60 per cent. of total United


Kingdom textile imports are now restricted within global limits both for the Community as a whole and for each member State. To allow room for new suppliers, the Community's dominant supplier, Hong Kong, about which my hon. Friend was concerned, has had to agree to accept cutbacks on existing levels of trade. Quota coverage on other products is much more comprehensive than in the past and growth rates in general are much lower. There are also more effective safeguard provisions for items not under quota.
I turn to the question of our relations with Japan. The Commission, supported by the Presidency, is intensifying its discussions with the Japanese and emphasising the need for them to take urgent steps to reduce their large trade and payment surplus. The Commission will be reporting to the Council of Ministers in April. Hon. Members mentioned cars. The Secretary of State for Trade has the situation under close scrutiny. We are seeking further clarification of Japan's intentions.

Mr. Scott-Hopkins: Can the Minister clarify the situation on the negotiations with Japan? There have been reports that the representative commissioner, who was sent over to negotiate with Japan, found that there was no flexibility and had to return. Can the Minister bring the House up to date?

Mr. Tomlinson: I am not in a position to go any further.
I have referred to all the questions asked by hon. Members except that raised by the hon. Member for Maidstone about the Channel Tunnel. Many important questions have been raised on a wide variety of topics. I have tried to answer them all. Most of the contributions have been informed and useful, but a few have been provocative. Some Opposition Members sought to put party prejudice above the national interest when referring to the Minister of Agriculture. I cannot agree with the views that have been expressed on that subject.
This has been an interesting debate. I assure the House that the Government will bear in mind all that has been said when formulating policies in the Community.

Sir A. Meyer: On a point of order, Mr. Deputy Speaker. In view of the unsatisfactory nature of the Minister's reply, I give notice that I shall seek to raise the matter on the Adjournment.

Question put and agreed to.

Resolved,
That this House takes note of the Report on Developments in the European Communities, July-December 1977 (Command Paper No. 7100).

Orders of the Day — COMMONWEALTH DEVELOPMENT CORPORATION BILL [Lords]

Order for Second Reading read.

9.33 p.m.

The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): I beg to move, That the Bill be now read a Second time.
This is purely a consolidation measure and makes no change in the existing law. The Bill consolidates the enactments relating to the Commonwealth Development Corporation—primarily the Overseas Resources Development Act 1959, the Commonwealth Development Act 1963 and the Overseas Resources Development Act 1969. In general the Bill consolidates provisions dealing with the constitution, powers and functions of the Commonwealth Development Corporation and the relevant financial provisions. It has been before the Joint Select Committee and has been certified as a purely consolidation measure.

9.34 p.m.

Mr. Daniel Awdry: As the Parliamentary Secretary said, this is a purely consolidation measure. We were informed in Committee that the Commonwealth Development Corporation welcomed this consolidation. A few minor corrections were made by the Committee, but no one made any objections to them. They were, of course, published in the Lord Chancellor's memorandum. The Committee is certain that the Bill represents existing law. It took the view that there was no particular point to which the attention of the House should be drawn.
I wish to mention the work of the Joint Committee on Consolidation of Bills. It is sad that we have run out of work. There are now no Bills awaiting our attention and we have no further work to do. At one time the Committee was considering meeting every fortnight and, if necessary, in two separate Committees. It is disappointing that we shall not be making the progress which we had hoped. I imagine that the reason for this is shortage of parliamentary draftsmen and the amount of new legislation that passes through the House.
I am certainly not making any party-political point about that. However, I am sure the Parliamentary Secretary would agree that the work of the Con-

solidation Committee, even if it is very unglamorous and highly technical, fulfils a very important function and is much appreciated by practitioners in the law. Therefore, I express the hope from this Box that more progress will be made in the process of consolidation next Session.
As the Parliamentary Secretary says, this measure is purely consolidation, and I have nothing to add about it.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Committee tomorrow.

Orders of the Day — NORTHERN IRELAND (EMERGENCY PROVISIONS) BILL [Lords]

Order for Second Reading read.

9.36 p.m.

The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur David son): I beg to move, That the Bill be now read a Second time.
This is a consolidation Bill. It consolidates most of the Northern Ireland (Emergency Provisions) Act 1973, as amended, together with the Northern Ireland (Young Persons) Act 1974 and several Statutory Instruments. Its provisions will have the same validity and the same requirement for renewal and will be subject to the same parliamentary procedures as the legislation that it will replace.
What the measure does is to set out the rights and responsibilities of the individual and the power and responsibility of the security forces in a more simple and understandable form. In view of the nature of the measures that are consolidated, I felt that I ought to make this clear to the House.

9.37 p.m.

Mr. Daniel Awdry: I am grateful to the Parliamentary Secretary for those few words of explanation, as I am sure, is the House. It does not look as though there will be a very long debate on this measure. It is purely consolidation, and the Opposition welcome it

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Committee tomorrow.

Orders of the Day — EMPLOYMENT RELATIONSHIP LAWS

9.38 p.m.

The Under-Secretary of State for Employment (Mr. John Grant): I beg to move,
That this House takes note of Commission Document No. R/1123/76 on Conflict of Laws on Employment Relationships in the Community.
The Commission's proposal on this matter was discussed at several meetings at official level in the Council machinery during the period of the United Kingdom Presidency in the first half of 1977, but discussions have been suspended since then to allow the Commission to review its proposal. We do not know when they will be resumed.
The Select Committee, in its report of 9th March 1977, recommended the proposal for debate, and I understand that it has since reconfirmed this recommendation on 1st February this year on receipt of our up-dated memorandum. Therefore, this debate has been outstanding for some time. That is really why we are here this evening, and not—let me be quite candid—because I believe that a debate on this document in the present state of uncertainty about it is likely to throw any blinding light on this very complex matter. However, at any rate I can welcome the views of hon. Members, and there is no question but that they will be taken very fully into account.
The purpose of the draft regulation is to provide a common approach throughout the Community in deciding which national law should be applied to emloyment relationships. In recent years this question has become increasingly important as a result of the expansion of companies' overseas activities. Employees may be transferred temporarily or permanently, from one establishment to another in a different country, and it is becoming common for people to be employed under contracts where their work is carried out either wholly or partly abroad for certain periods.
The need for clear rules in the Community is further reinforced by the Treaty of Rome provisions on the free movement of labour, which, as the House knows, provide that people may move freely between the member States of the

Community to take up jobs. As a result, contracts of employment with an international element are likely to become more common.
The present rules of private international law vary widely from country to country and the situation is undoubtedly confused in relation to contracts of all kinds and to civil wrongs. Therefore, action by the Commission to clarify the situation is to be welcomed. I shall come later to whether the proposals are considered to be the best and most suitable way forward.
First, let me give a little of the history. The Commission was invited to study problems of conflict of labour laws following the adoption of Regulation 1612/68 on freedom of movement of workers. Its first proposed draft regulation was forwarded to the Council in February 1972 and was subsequently amended to the present version in the light of comments made by the European Assembly and the Economic and Social Committee in 1972 and 1973. The House will have seen from the explanatory memorandum that the Government consider the draft contains some technical faults and needs further clarification, and I shall try to explain some of the main points of difficulty.
Article 1 defines the regulation's scope as relating to all employment relationships to be fulfilled in the Community. Thus, it applies regardless of the nationality of the employee to avoid the application of more than one set of conflicting rules to work done in the Community. However, the question of what constitutes an employment relationship is left to the laws of each member State, with no indication as to which law is to decide this question; and this could create potential difficulties. For example, Dutch law might regard a particular contract as creating an employment relationship in circumstances where English law might not, so that the outcome of litigation would depend on which court was involved. It is clear also that the scope of the regulation would have to be confined to work done principally or normally within the Community for the sake of consistency with the subsequent articles.
Article 2 contains a very broad definition of labour law which needs clarification. It also excludes capacity to enter


into contracts of employment. This could be unfortunate in that it would allow one set of rules to govern contractual capacity and another to govern the validity of the contract. Article 3 lays down as a basic principle that the employment relationship is to be governed by the law of the member State in which the worker normally carries out his work. The employment relationships of workers on ships flying the flag of a member State are to be subject to the law of the flag; those in international land, air or inland water transport by the law of the member State within which their employer has its registered office or branch. The basic principle is, of course, similar to that underlying our own labour statutes, although our recent experience of these indicates that the word "normally" needs definition, particularly if contained in an instrument of direct applicability like a regulation.
For example, it is not clear whether the concept used is meant to exclude there being more than one country where an employee can be said "normally" to work. It is also not clear whether it refers to the whole period covered by the contract of employment. Some indication that it does not do so seems to follow from Article 4, which is intended to lay down a special rule for workers sent temporarily to a member State—that is, as defined, for a period not exceeding 12 months. As drafted, the rule for these workers is not clear, but it is arguable that this provision might be unnecessary in any case if the basic rule of Article 3 applied to the contracts as a whole.
Article 5 is intended to allow some further choice to the contracting parties if an employee is transferred from an establishment in one member State to an establishment in another member State.
Article 6 is meant to cover workers who work for some of their time in a member State but have no normal place of employment. It allows a fairly wide degree of choice provided that the law of a member State is chosen, but it is not clear what would happen if a different choice were made, particularly if that choice were made outside the EEC. There is also no provision for situations where no choice is made.
Article 7 is the one provision allowing a free choice of law, including the law

of a third country. However, this applies only to a particular group—managerial or highly specialised employees—for which there are difficulties of definition, as pointed out by the Select Committee.
Article 8 as drafted applies certain mandatory provisions at the actual place of work rather than the normal place of work, but only to cases falling under Articles 4 to 7, although it may well have been intended to override the basic rule in Article 3 as well. Some of the provisions listed certainly seem inappropriate to the type of case covered by Articles 4 to 6, temporary postings and work in more than one State. On the other hand, the list fails to catch all present provisions which might reasonably be classed as "mandatory rules"—for example, those relating to sex and racial discrimination, and, as has been pointed out by the Select Committee, to unfair dismissal and redundancy.
The regulation as it stands would need to contain some transitional provisions if it were to go ahead. However, this brief outline of some of the problems associated with it in its present form may be enough to indicate that a regulation may not perhaps be the most appropriate instrument for dealing with rules of private international law in this field.
I now turn briefly to a further basic issue which needs to be considered. That is whether it is desirable to have special rules on this subject applying only to employment in the European Community or whether it would not be better to apply to contracts of employment in the EEC general rules applicable to contracts of employment anywhere, and, indeed, to have those general rules for contracts of employment modelled as closely as the circumstances permit on the rules for contracts generally.
Discussions are actually going on in Brussels between experts from member States on a draft EEC convention on conflicts of laws relating to contractual obligations as a whole. Such a convention, while of much wider scope, will, of course, in its application to contracts of employment, cover the same ground as the draft regulations.
The discussions, I understand, are based on a draft convention entitled "Convention on the Law Applicable to


Contractual and Non-Contractual Obligations", and in due course the House will no doubt have an opportunity to consider any texts that may be put forward. The draft was initially prepared in 1972 at the initiative of the Benelux States by a Commission working group of legal experts from the member States and is currently being revised. Texts of the preliminary draft were circulated to people and bodies in this country likely to be interested in such subjects by the Law Commission in 1974.
As is pointed out in the memorandum, the two instruments would probably produce the same result in many cases, but this would result in complex legal distinctions, and it is difficult to justify the existence side by side of two such instruments containing minor variations.

Mr. J. Enoch Powell: The hon. Gentleman said that the House would have the opportunity to see the draft convention. Is the convention an instrument which falls within the rules which bring documents before the House after recommendation by the Select Committee?

Mr. Grant: My understanding is that it would fall to the House to consider it. I am not clear about the point the right hon. Gentleman makes about the Select Committee, but I shall take advice on it and try to reply later.
I was saying that it would be difficult to justify having two instruments of this kind running side by side. It would be pointless. It is doubtful whether it would produce any worthwhile clarification of the existing situation. In principle, one instrument having worldwide effect seems preferable, more particularly if as seems likely—and this is still a working document—the convention accords better with the rules which operate in the rest of the world than do the likely EEC regulations.
It is not known when the Commission will present its revised proposal for a regulation, but it now appears that the convention may be finalised quite soon. It may be that the case for an instrument supplementing the convention's provisions on employment contracts should be looked at then, in the light of the text of the convention once it is sent to the Council of Ministers.

9.50 p.m.

Mr. Fred Silvester: The regulation that we are discovering, or, rather discussing—

Mr. Tom Litterick: The hon. Gentleman was right the first time.

Mr. Silvester: It has been around for quite a while, although perhaps the House has not discovered it before. Most people, in discussing the European Economic Community, even if against it, would reckon that it has a perfect right to intervene in such matters as we are discussing tonight, since it is concerned with international activities. The regulation should have no effect on firms operating in this country with only English staff, but there is undoubtedly a problem. There do not seem to be many figures available, but those that I have managed to find indicate that about 1·7 million EEC nationals are working in countries other than their own. Therefore, substantial numbers of people are involved.
The problem is whether the proposals before us are likely to help or hinder in that situation. The question is answered by the EEC in two ways. Since there are now so many international companies operating, Document R/1123/76 points out that, in the event of a legal dispute, venues can be established in several member States. The venue can be established by the registered office of the undertaking, the branch or the place of performance. It can be established by agreement or through the entering of an appearance. The document adds that
Since each court must establish the applicable labour law according to the conflict of law rules of the lex fori, it is evident that similar cases of dispute affecting other States may be decided differently depending on the State in which the court seized of the matter is located.
I think we would all agree that it would be nice if we could achieve a greater uniformity of law in this matter for countries operating across borders.
The other matter which occupied most attention in the European Parliament was the need, having established the free movement of labour, to make sure that the laws operating in the various countries do not weaken the protection and do not cause ill feeling between different employees in the same firm.
Obviously, it is theoretically possible that a worker coming in from another country and previously employed under different rules from those applying in the country to which he was going could bring with him employment conditions which were worse than those of the workers in the establishment in which he was to be employed. There could, therefore, be workers working side by side in the same establishment according to different rules, and workers could thereby suffer disadvantage. I do not know how real that danger is. It may become more real as the Community extends and takes in countries where the laws may not be what the Community would regard as advanced. I am not absolutely convinced, however, that this is a real danger facing us at the present time, although it may be a problem for the future.
The regulation seems to me to be quite sensible. If we are to choose one law, it seems to me that to choose the law of the place where the work is being done would be likely to lead to the least objection and also to the least upset in the working conditions of the countries concerned. But the regulation is obviously too broad, because the Commission has put down a number of exceptions, in particular to Article 7, to which the Minister referred, which allows special categories of people to be excepted. I believe that that could lead to very grave difficulties, and I do not know the way in which it will be applied.
I am sure that hon. Members will have read the article, but I remind them that the people who can be excepted, if they produce a written agreement, are those in a special position. It can also be because of the special nature of the work. The article states that
A special position of the worker in the establishment exists where the latter carries out managerial or advisory functions. Work of a special nature means activities which require a high degree of specialisation on the part of the worker.
Such phrases are open to much interpretation.
The Trades Union Congress, in its representations to our Select Committee, draws attention to this particular point. It objects to managerial and professional people being taken out of the list, on the ground, I think, that we should treat everyone the same. In a sense that is

a laudable objection, but the work of international companies would grind to a halt if they were unable to make special concessions for some of their leading staff if they wished them to go to other EEC countries. The practicality of the matter is that the Commission will have to find a way round this problem, and it has done so by Article 7. Personally, I believe that this article will lead to considerable difficulty.
The other point which the Minister made, and with which I entirely agree, relates to the big problem of the convention. I agree with the right hon. Member for Down, South (Mr. Powell) that it is an entirely different kind of animal. It is not one to which we shall be committed in the event of its being an agreement. It is not automatically binding like the regulation.
In those circumstances, we shall be in a difficult position because it will be possible for different laws to apply, for example, according to whether a worker was from an EEC country or from outside the EEC. The convention will apply to countries which are outside the EEC as well as to the EEC. We shall, therefore, be faced with two highly complex pieces of law operating simultaneously. I do not think that can conceivably be right.
What worries me slightly is that the Minister said that he was hoping that the convention would be agreed shortly. The consultative document put out by the Law Commission was very ambivalent about the convention. It will be interesting to hear whether the position of the Law Commission has changed as a result of its consultations.
The Commission says that it is consulting about whether it is desirable to have such a convention at all. It goes on to say:
In any case, it is for consideration whether it would not be better to deal with the matters proposed in the Convention in a series of more limited conventions dealing with each matter separately".
Those of us who have tried to wade our way through that convention would agree that it gets impossibly complex.
As the Minister will know with regard to law relating to employment contracts, the convention contains a different set of rules from those applying to workers generally. His theory that we should wait for the convention, that the convention


will be binding and that we shall then have a common set of rules for all contracts, including employment contracts, is not justified. He might like to comment on that.
My understanding from the convention is that the rules relating to employment are different from those relating to other forms of contract. It therefore means that this regulation—which, in a sense, is one which we can agree was an appropriate matter for the Commission because it does something in pursuit of having free movement of workers—is one that should certainly be considered.
The particular documents before us are defective. I hope that it will be possible, without stopping the enthusiasm for getting some kind of common denominator for companies operating within the EEC, not to press ahead with either of them in its present form, because time is not of the essence.
It would be much better to have a form of law which can stand the test of time and which would not lead, as I suspect this one would, to a great deal more litigation than it will solve.

10.0 p.m.

Mr. Max Madden: Whether the documents before us are defective I am not qualified to say, but it would not be unknown in Common Market matters for documents to be defective. They are invariably defective or unavailable or they have been preceded or overtaken by events. However, we must assume that these documents are proper, although I must say that, if nothing else, my hon. Friend the Under-Secretary has demonstrated in this brief debate that there is no burning enthusiasm for these regulations coming from St. James's Square. The Department of Employment certainly does not regard these matters with any great zeal or enthusiasm. I sense that it regards them as something of a hornet's nest, an opinion which a number of Government supporters share fully.
I should be grateful if my hon. Friend could comment on a number of matters to which I shall refer and give some answers to certain questions.
Essentially, we are concerned in this debate with one of the major principles of the Common Market, namely, the free movement of labour within the Mar-

ket, and, in the context of other debates which are raging in the country about the ability of people to come here or of United Kingdom nationals to go to other countries, it is important to try to establish some facts about the free movement of labour within the Common Market.
To place the facts on the record, it is useful to quote the rights of European Community nationals. I understand them to be as follows:
Nationals of member states of the European Community do not require work permits and are admitted freely to take or look for employment or set up in business. They are normally admitted for six months in the first instance. When a European Community national has entered employment he applies for and is issued with a residence permit which is normally valid for five years. After four years in employment the time limit on his stay may be removed. If the duration of the employment is expected to be less than 12 months the permit is issued for the period of employment only. If a person has not established himself in employment or in a self-employed occupation by the end of six months he may be refused a residence permit, although a short extension of his stay may be granted if it is needed to complete arrangements for employment. The spouse, children under 21, older children if still dependent, and dependent parents and grandparents of a national of a member state of the European Community coming to take employment may be given permission to enter the United Kingdom for the same period. Students and other temporary visitors from European Community countries are treated like other foreign nationals.
I understand that this is not altogether academic since, between 1973 and 1976, the number of residence permits issued to EEC nationals wishing to come to the United Kingdom totalled more than 10,000 in 1973, more than 11,000 in 1974, more than 8,000 in 1975 and more than 7,000 in 1976. The figures for acceptances for settlement were in the same years more than 1,000 in 1973, more than 1,000 in 1974, nearly 2,000 in 1975, and 1,600 in 1976. Those figures do not take account of citizens of the Irish Republic who do not have to obtain residence permits to come to the United Kingdom.
I should like to hear from the Minister whether he can give us any later information, since my figures relate to the period up to 1976. If he has any further information, I am sure that it will be useful. But the clear fact remains that there is an obvious right for EEC nationals and their dependants either to seek residence permits or to seek to be accepted for settlement.
The other matter that I wish to refer to concerns the position of migrant workers from non-EEC countries who seek employment within the Common Market. The figure is again far from being insubstantial. I understand that in 1975 there were nearly 4·5 million migrant workers in the Common Market. They came from Spain, Greece, Portugal, Turkey, Yugoslavia, Algeria, Morocco and Tunisia. There was a miscellaneous group of 365,000, bringing the total to nearly 4·5 million. This figure referred to the position in 1975 and clearly, with mounting unemployment, there has been pressure from a number of Common Market member States, notably Germany and, to a lesser extent, France, to reduce the number of migrant workers within their countries.
I should like to know from the Minister what the latest estimates are about the number of migrant workers within the EEC at present. Second, can he give any estimate of the likely number who can be expected to be seeking employment in future? I should particularly like to know the situation regarding Turkish workers because I understood that the intention was progressively to give to Turks the right of full freedom to seek work within the EEC by 1986. Pressure has been exerted by the Germans. I understand that the position may be that, despite the agreement to which I have referred, all that the Common Market has offered to the Turks, following German pressure, is security of tenure for their workers already in Europe.
I understand that, of the migrant workers from Greece, Portugal and Spain, only the Greeks have tended to concentrate in West Germany. In 1975 there were about 196,000 in West Germany of the total of 260,000 Greeks in the Community. The Portuguese and Spanish have tended to make for France. In 1975 there were 265,000 Spanish workers and 475,000 Portuguese workers in France. More than half of France's immigrant labour population comes from the three Mahgreb countries of Algeria, Morocco and Tunisia. The Algerians are in the majority. The Portuguese are only a short way behind, followed closely by the Spanish immigrants.
Bearing in mind the rights of EEC nationals to residence and settlement, and

bearing in mind the potential increase in the number who would have this right, should the Common Market be extended to include Spain, Portugal and Greece, this is a factor to be taken account of. Does the Minister agree that if any Government were to seek to vary the rights and conditions on which others were allowed to enter this country the Common Market would insist on rights comparable with those extended to EEC nationals? Clearly those rights are far more favourable than currently exist for some other nationals and are far more favourable than other rumoured suggestions which we see, even in today's newspapers.
If the Leader of the Opposition wishes to offer the British people an end to immigration, or even the prospect of an end to immigration, does the Minister agree that we must expect the Conservative Party to hurl itself into opposition to the Common Market and to campaign for Britain's withdrawal, since so long as we remain a member and the Community has the free movement of labour as one of its fundamental principles no one, not even the right hon. Lady, can offer the prospect of an end to immigration into the United Kingdom on the part of substantial numbers of working men and women from a considerable number of countries?

10.10 p.m.

Mr. J. W. Rooker: I know that the Select Committee has recommended that the House should discuss the draft instrument. I am aware of the comments in paragraph 6 of the memorandum submitted by the Department of Employment, which says:
The underlying intention of many of the detailed provisions of the draft Regulation as it stands is, however, still not clear.
That is putting it at its mildest. Having read through the document, I agree that it certainly is imprecise, and lacking in sensitivity. It is what one of my hon. Friends earlier today termed "punk law". It could not be implemented in any way as it stands.
In the memorandum, my hon. Friend the Minister makes the point that under under Article 8 certain legislative provisions in force at the place where the work is carried out cannot be excluded even in the exceptional case where the


labour laws of that country do not apply. That takes a little understanding, and it is not exactly precisely drafted. Article 8, on page 5, lists an incredible amount of labour legislation covering about a dozen subjects. It is quite clear that the individual laws of the countries concerned override the provisions of a Articles 4, 5 and 6.
Provision (b) of Article 8 relates to the maximum daily and weekly working hours and permission to depart therefrom. It is well known that this country alone in the Common Market does not have any restrictions whatever on the weekly hours that can be worked by adult males. There are no restrictions at all on overtime.
I am in favour of statutory restrictions on overtime, especially as they apply in Germany. Holland and other EEC countries except Denmark—which is hardly our economic competitor in the sense that Germany is. This is one of the areas excluded from the provisions of Articles 4, 5 and 6.
The hon. Member for Manchester, Withington (Mr. Silvester) mentioned that it was not a major problem that workers could come in from abroad and work in Britain. But there are, for example, German-controlled factories in this country—there is one in Basingstoke—so how can German nationals working here square their circumstances with ensuring that at the employer's behest they do not work themselves into the ground? There is nothing to stop them from working 160 hours a week. How can we stop this loophole?
The hon. Member for Withington did not refer to the fact that at the moment there is a massive campaign being orchestrated by the Conservative Party and its allies outside the House against many of the protective laws that we have implemented in the last few years. One of our arguments has been that we are only dragging ourselves up to the level already enjoyed by the rest of the Common Market. Certainly in Germany the protective laws have been much wider and more precise than those in this country.
I understand why there is a certain degree of ambivalence from the hon. Member. What the Common Market is seeking to do is to codify and uplift job protection rights throughout the EEC

because in the past immigrant workers have been treated shabbily by Germany. The moment there is a downturn, they are packed on cattle trucks back to Yugoslavia by the trainload. These migrant workers are devoid of civil rights and the ordinary protection given to citizens of Germany.
This is an attempt by the Common Market to improve job protection rights of Europe's workers, whether they be the present group or Spanish, Greek and Portguese workers in future. While this is all happening, the so-called European party in this country is orchestrating a campaign against our protective laws. That campaign is to be noted both in this House and outside.
The hon. Member for Withington owes it to his electors to make the Conservatives' position clear. Do the Conservatives agree with what the Common Market is seeking to do in an expanding area of job protection? If they do not agree, let them say so. Let us have no more of this hypocrisy about the meagre gains we have made in this country in the last four years.

10.16 p.m.

Mr. John Grant: This has been a brief but useful debate, and it has succeeded in underlining the disquiet felt in the House about the proposals that are before us.
The hon. Member for Manchester, Withington (Mr. Silvester) said that there would be difficulties in regard to Article 7. He was right to take that view. The argument advanced to grant a free choice to the worker under Article 7—that is to say, managerial or highly specialised employees—is that they are assumed to be more knowledgeable about the range of laws available and better able to negotiate an employment contract that is favourable to them. Whatever the validity of those assumptions, it must be said that by offering a choice to some workers rather than others the article would create a more privileged class of worker. That is the TUC's view. Therefore, we have asked that Article 7 should include everybody or that it should be dropped.
The other main point raised by the hon. Gentleman related to the convention and the view of the Law Commission. It was proper to mention that matter, but I wish to point out that we are not debating that convention tonight. Since I have


not seen the updated proposals, which may soon be with us, I do not think I can say anything useful about the situation.
The right hon. Member for Down, South (Mr. Powell) asked whether this matter would come before the House. The answer is in the affirmative. Examination of the draft convention when it has reached a sufficiently settled stage of documentation to warrant showing to Parliament would have to be settled by inter-State negotiations undertaken by the Government. That stage has not yet been reached, and the document which is still being examined at this stage is not much more than a matter of academic interest.
My hon. Friend the Member for Sowerby (Mr. Madden) suggested that the Department of Employment was not viewing this proposal with any great zeal or enthusiasm. I certainly treat all these matters with great zeal and enthusiasm—although perhaps some with more zeal than others.
My hon. Friend asked me many questions about figures. I am sure that all that was strictly in order within the terms of the proposals, or the Chair would have stopped him. The point relating to residence permits is a matter for my right hon. Friend the Home Secretary.

Mr. Speaker: Order. I hate these snide digs, whoever is in the Chair. These are complicated and wide matters, and I advise the Minister to read the documents as well.

Mr. Grant: I have had my difficulties, Mr. Speaker.
I cannot answer all the statistical questions put by my hon. Friend the Member for Sowerby, but I think he will find that many of them will be answered in the White Paper on enlargement which is to be published in due course. If my hon. Friend wishes, I shall try to deal with the appropriate points in writing.
I do not believe that I should follow what my hon. Friend said about the Leader of the Opposition's suggestion that we can see a clear prospect of an end to immigration, except to say that broadly I share his view that this is a fallacious and phoney argument. How-

ever, it is not appropriate to the discussion of the document.
My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) suggested that I had been mild in saying that the document was not clear. I was indeed being mild. There is a great deal of confusion.
My hon. Friend asked about Article 8 and how German workers would fare, bearing in mind the overtime restrictions there, if they came to work in this country. The national mandatory laws of the State where the work is done would over-ride Articles 4 to 7, including hours of work if there were laws on that.
I share my hon. Friend's view about the orchestrated campaign against certain protective measures passed by the Government, particularly the Employment Protection Act. I shall not labour the point because it is not strictly relevant to the document, but it is most unfortunate that the Leader of the Opposition has seen fit to join the campaign and make such attacks.
I do not believe that anything in the document would adversely affect our protective legislation, and it could be that we may be helped to some extent in furthering our aims if we can get some clarity and harmonisation here.

Question put and agreed to.

Resolved,
That this House takes note of Commission Document No. R/1123/76 on Conflict of Laws on Employment Relationships in the Community.

Orders of the Day — GUN BARREL PROOF BILL [Lords]

Order for Second Reading read.

Motion made, and Question put forth-with, pursuant to Standing Order No. 66 (Second Reading Committees), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — MEDICAL BILL [Lords]

Order for Second Reading read.

Motion made, and Question put forth-with, pursuant to Standing Order No. 66 (Second Reading Committees), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — CADBURY-SCHWEPPES PLANT, BIRMINGHAM

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]

10.23 p.m.

Mr. Turn Litterick: I wish to discuss the proposed closure of the Cadbury-Schweppes tea blending and packaging plant at Bordesley. The proposal of Cadbury-Schweppes is basically a simple one and was decided by the determination of the company to maximise its profits. It has decided to remove a highly profitable enterprise, employing 600 people, from the centre of Birmingham and place the operation in a marginally profitable factory at Moreton near Wallasey so that it shall be more profitable.
The employment effects of this will be simple in Birmingham—600 jobs will be lost. Cadbury-Schweppes has no proposals to create new jobs in the city and considerably fewer than 600 jobs—probably fewer than 300—will become available at Moreton. In short, the economy will lose more than 300 jobs as a result of the closure.
With 40,000 people in Birmingham currently registered as unemployed, the chances of these 600 workers being re-employed are slender indeed, particularly as it is a stable labour force with a large proportion of women who, for social reasons, are relatively immobile. Many live within a few minutes of the factory. Because of the stability of the work force, there has been a community of spirit which has been of great value to the work people and this will also be irretrievably lost through the closure.
The cost to the taxpayer will be considerable if half the labour force is still unemployed six months after being made redundant. By that time, about £250,000 will have been paid in unemployment benefits.
Cadbury-Schweppes will benefit handsomely at the taxpayers' expense. If 300 extra jobs are made available at Moreton—that is the maximum—as a result of the closure, Cadbury-Schweppes will receive approximately £300,000 of the taxpayers' money in the first year of operation through the temporary employment sub-

sidy. The firm will also receive an investment grant of about 22½ per cent. of the value of the plant installed at Moreton—in excess of £200,000 of taxpayers' money. In addition, it will receive grants in respect of the expenses of moving existing plant from Bordesley to Moreton and special tax relief on the depreciation cost of the new plant. This company will benefit directly at the taxpayers' expense to the tune of more than £600,000 during the first year of its operations at the Moreton plant.
To put it into perspective, the Minister of State at the Department of the Environment today advised me in a Written Answer that £2½ million is to be provided for the inner-urban area partnership strategy for the regeneration of the Birmingham central area, while £600,000 or more is to be given to a single private firm that proposes to remove from Birmingham 600 jobs from the central area of the city—the very area covered by the partnership strategy.
Nor is this the end of Cadbury's gains from this move. It will save on the elimination of the overhead costs of running the Bordesley plant and it will be getting its labour 10 per cent. cheaper in Cheshire than it is presently paying in Birmingham. The closure wilt give credance to the often repeated myth that Birmingham and the West Midlands are being deindustrialised as a result of Government policy—that is, the regional policy of successive Governments over the years.
In fact, as the West Midlands Economic Planning Council has pointed out more than once, 70 per cent. of all the jobs lost in the West Midlands economy during the last few years have been lost in the metal fabrication trades associated with the car industry and have been caused entirely by the contraction of those industries and not by the geographical relocation of those industries.
The myth of the IDC policy as a negative power devastating the economy of the West Midlands is hollow. It is without factual basis. It is also the case that this particular closure dramatises attitudes in a way which, in my opinion at least, is extremely unfortunate.
I would take, first, the attitude of the Cadbury workers themselves. It is shameful that the Cadbury workers—I mean the


Bournville workers—would not lift a finger to defend their colleagues at the old Typhoo tea factory. They behaved like traditional institutionalised Cadbury workers. They would not raise their voices even to protect their colleagues at the Bordesley plant. That is shameful.
Shameful, too, is the attitude of the trade unions in the Wallasey area. They were clearly falling over themselves to steal the jobs of the Bordesley workers. One cannot describe it in any other terms. They were down here as quick as quick, demanding of the appropriate Minister that he insist that the jobs be relocated up there. Their attitude was shameful and is in direct contrast to the attitude, for example, of the Coventry British Leyland workers who, when they learned of the determination of Michael Edwardes to axe the Speke plant in Liverpool, sprang to the defence of their colleagues in Liverpool. That is working-class unity. It is something about which apparently the Cadbury Bournville workers and the trade unions in the Wallasey area know nothing. At the risk of sounding trite, those people will have to learn bitterly that the profits or rewards of disunity are weakness and further exploitation by their employers. This is the basic lesson of this closure.
It also raises the character of the company which is bringing about the closure. The background to the matter is a reputation by Cadburys in its previous incarnation—that is, as a benevolent employer. That was, first and foremost, the kind of benevolent society which would see to it that the interests of the people and the community came first. This event demonstrates very clearly that Cadbury-Schweppes is simply a multi-product conglomerate like any other multi-product conglomerate which is interested in neither the people who work for it nor in the communities in which it operates, except in so far as it produces a profit. It has done its sums, and those sums indicate clearly that it will profit by this move alone by about £1 million at the taxpayers' expense simply by shifting existing plant from Moreton. Its accountants have told it that, and that is why the move is being made.
These are the same reasons that motivated the people who devastated my home in the Clyde Valley two generations ago. They did not care what happened

to the people they left behind because in the ruthless pursuit of profit they were prepared to leave in their wake nothing but human and social ruin. That is the lesson of the closure that Cadbury-Schweppes is ruthlessly pressing home. We should ignore its bland rhetoric of benevolent intentions and look at the facts instead—look at what it is doing to Birmingham. We should dismiss for once and all the myth that regional policy has anything to do with this. It is nothing more or less than capitalism rampant in search of profits.

10.33 p.m.

Mr. J. W. Rooker: rose—

Mr. Speaker: Order. I understand that the hon. Member agreed with the Minister and his hon. Friend that he should intervene in the debate.

Mr. Rooker: Yes, Mr. Speaker. I am most grateful to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Litterick) and my hon. Friend the Minister. So that it is on the record, may I say that I am delighted to see my right hon. Friend the Member for Birmingham Sparkbrook (Mr. Hattersley) in the Chamber for the debate? He has taken a personal interest in the plight of the employees in this factory, many of whom are his constituents, just as many of them are mine.
I do not want to repeat what my hon. Friend said but I wish to add a little meat to the bones of the reasons behind the move and refer to the money that this company has received from the taxpayer. In its latest annual report it states that 1976 was a successful year for the Typhoo brand, which is involved in this closure. So it was, to the extent that the company was able to donate £10,000 to the Conservative Party. That is hardly surprising, since on the board sits Lord Carrington, a member of the Shadow Cabinet. The company made £46 million in profit before tax and is alleged to have paid £25 million in tax.
The workers at the factory might think that the company has made a substantial contribution to the British economy with that tax figure, but one deduces from the balance sheet and accounts that that is not the full story. Of that tax, £9·5 million was paid to overseas Governments. Only £2·2 million, as far as I can tell,


was paid to the United Kingdom Government. That is a total of £11·7 million in tax paid. What happened to the other £14 million? I can tell you, Mr. Speaker, as I have told my constituents. Of that sum £13·3 million was given back to the company by the Government by way of deferred corporation tax. That sum goes well over and above the money that my hon. Friend said the company will be getting from the taxpayer. But there is an accumulated amount of deferred tax substantially greater than that simply because of the stock appreciation relief scheme operated by the Government since we came to power in 1974.
This, then, is not as clear cut as when the company says that it is moving for economic reasons. There are economic reasons, of course. But the true economic reasons have not been made clear to the employees or to the hon. Members whose constituents are employed by the company.
We were given various reasons for the closure. Each time a reason was given it was knocked down by either Back Benchers or Ministers who had access to other information. We are now left with the bare bones that it is a closure for financial reasons. As I have made clear, the company is nowhere near bankrupt and has received substantial financial benefit from the Government in the past couple of years.
The other aspect of the closure that deeply affects those who represent Birmingham is the more than apparent contradiction in policy. In the Financial Times of Tuesday 21st February the Midlands correspondent wrote:
The decision announced yesterday by Cadbury-Schweppes … with the loss of 550 jobs, has exposed a clash of interest between Government departments.
Indeed, The Birmingham Post went further and commented that following the announcement it was known that the Minister for Housing and Construction—my right hon. Friend happens to hold a most relevant chairmanship—met Mr. Adrian Cadbury, the company chairman, as he was going to do if the closure was announced.
The political correspondent of The Birmingham Post, John Lewis, wrote earlier this week:

There is apparently resentment that Mr. Freeson, who has done much of the pioneer work on inner cities, should have involved himself. Amazingly, there have been objections to the meeting with Mr. Cadbury taking place.
There have been objections from other Whitehall Departments, from other Ministers. It is deplorable that the impression has been given that my right hon. and hon. Friends in the Department of Industry do not give a tinker's cuss about this issue because it conforms broadly to regional policy.
A private company wants to pull up the stumps and move to a special development area, or an area that has priority over the inner cities. It is unthinkable that the Department of Industry should have been unrepresented at today's meeting, but that is what I am informed. At a meeting when the shop stewards lobbied some of my hon. Friends and Ministers last week, there was a notable lack of effort on the part of the Department. I hope that my remarks will not escape the attention of the Minister responsible for answering the debate and those trying to get something worth while from the policy to regenerate the economy of the inner cities.
I hope that my hon. Friend will not give us the usual Adjournment debate reply—a few platitudes—but will be positive. I hope that he will tell us what happened today and what the Government will do about it tomorrow and next week, so that we may report back to our constituents that the issue has been treated seriously at the highest levels. Indeed, there is suspicion that that consideration has not been given. It is incumbent upon my hon. Friend to salvage some vestige of credibility for the Government's policy from this debacle.

10.39 p.m.

The Under-Secretary of State for Employment (Mr. John Golding): My hon. Friends the Members for Birmingham, Selly Oak (Mr. Litterick) and Birmingham, Perry Barr (Mr. Rooker) have expressed with great feeling and eloquence the real concern that is felt in Birmingham about the Typhoo closure. Previously my right hon. Friends the Members for Birmingham, Small Heath (Mr. Howell), the Minister of State, Department of the Environment, and Birmingham, Spark-brook (Mr. Hattersley), the Secretary of


State for Prices and Consumer Protection, whom I am delighted to see in the Chamber, together with my hon. Friends the Members for Birmingham, Northfield (Mr. Carter), the Under-Secretary of State for Northern Ireland, Meriden (Mr. Tomlinson), the Under-Secretary of State for Foreign and Commonwealth Affairs, and Nuneaton (Mr. Huckfield), the Under-Secretary of State for Industry, have made their concern about the problem known to me.
Although the unemployment figures for Birmingham as a whole are much lower than those for the Liverpool travel-to-work area, I appreciate that unemployment in the constituency of my right hon. Friend the Member for Small Heath is very much worse than it is in some other parts of Birmingham. I recognize, too, that the situation could create a difficult atmosphere for the new partnership committee as it begins its work of revitalising the worst hit areas of Birmingham. I hope not, because I believe that the partnership has much to offer. Indeed, I am very sorry that the next meeting of the partnership, on Tuesday, clashes with Department of Employment Questions and so I shall be unable to attend to face the music.
There are likely to be some hard words spoken, because it is not possible for the Government to agree to what the Birmingham and other West Midland MPs and the shop stewards of Bordesley Street have asked us to do. We cannot say to Cadbury-Schweppes that it should not make the move. We cannot say to Cadbury-Schweppes that we will block any grants to which the company may be entitled. When we introduced the partnerships we made it clear that the assisted areas would continue to have priority over partnership areas in non-assisted areas.
I have listened to the Birmingham and Moreton shop stewards putting quite opposite points of view, each group stressing the problems faced by its own town and tending to minimise the difficulties of the other. I have had to face deputations from each town explaining to them separately the problems facing the other town. With the Minister of State, Department of the Environment, I have also discussed the problem with Sir Adrian Cadbury.
Perhaps I can outline the position as seen from the firm's point of view. The firm believes that there is need for a change. First, the amount of tea being drunk has dropped significantly. Secondly, there is a need for new machinery because of metrication. The firm has made it clear that the present machinery is old and would have had to be replaced shortly by new machines which, because they are five times faster, would have caused redundancies in any case.
The company was faced with deciding how to make the change. I was told, as I was by the Moreton shop stewards, that it would make sense to concentrate tea production undertaken at both Birmingham and Birkenhead in one place. The Birkenhead stewards tell me—and this is just their word—that it was agreed amongst the trade unionists that the decision about where to go should be left to management and that, once made, the decision would be accepted.
In the event, Cadbury-Schweppes chose Moreton.

Mr. Reginald Eyre: That is not true at all.

Mr. Golding: Of course the firm had some financial reasons in mind. The Moreton site, being single storey, is in the firm's view better, as are communications. The firm also took into account the possibility of a Government grant, although it did not regard this as crucial.
I take the opportunity to say publicly to my hon. Friend the Member for Perry Barr that no Government pressure has been put on the company to move.

Mr. Eyre: Will the Minister acknowledge that there is a direct contradiction between the assisted areas policy and the inner city areas policy which operated in this case to the detriment of Birmingham?

Mr. Golding: Yes. Of course, this is, a very difficult case. The choice has to be made whether jobs go to one area of high unemployment or to another area of high unemployment. That is the dilemma which faces me as a Minister for employment. Therefore, I certainly do not dodge the difficult situation that we are in.
The company also argued that the move to Moreton could reduce overheads. In


addition—and this is both a financial and a social argument which has carried most weight with the Moreton stewards—the move to Moreton could secure the future of that site, where 3,000 are presently employed. I make this point because the issue is not a straight one of the loss of 570 jobs, full-time or part-time, in Birmingham to gain 300 jobs on Merseyside. With the new machinery, it is unlikely that there would have been 570 jobs in Birmingham, anyway. But more important, as the Birkenhead stewards laid it on the line very hard—and I met them in Newcastle-under-Lyme, not in London—without the move of the tea production to Moreton, 3,000 jobs on Merseyside could be in doubt.

Mr. Rooker: My hon. Friend has to accept that this is outrageous. There is no indication whatsoever that the whole 3,000 jobs would have gone. There are many, many highly profitable lines at Moreton. There would have been a cut-down on some loss-makers. It is not the fact that it was 3,000 jobs at Moreton or 500 in Birmingham. The fact is that it would have been about 500 in Moreton for 500 in Birmingham. My hon. Friend is swallowing the company's line wholesale, and it is totally false.

Mr. Golding: What I said was not what the company told me, not on this not that the company believed this. What I said very carefully was that the Birkenhead stewards laid this on the line to me, and I have just put it as the view of the Birkenhead stewards.
I am a born Brummy, as my hon. Friends know, but I really have an obligation to put to the House tonight the view of the Birkenhead stewards, as I have to put the view of those in Birmingham. Certainly, what was made clear to me by the Birkenhead stewards was that there would have been an immediate loss of tea jobs in Moreton if tea production had been centred on the Bordesley Street site. Therefore, it has not been a case just of the Birkenhead men wanting to steal jobs. A real decision had to be taken. Both groups of workers stood to lose jobs as a consequence of the decision. I do not think that one can direct criticism at the Birkenhead stewards for the stand that they took on behalf of their membership.

Mr. Litterick: Does not my hon. Friend agree, however, that the tea operations at Moreton were marginal to the Moreton operation, whereas they are the sole occupation to the Bordesley Street factory?

Mr. Golding: The stewards from Birkenhead told me that the jobs of the workers at Moreton dependent on tea were of extreme importance to the workers engaged on them—

Mr. Litterick: It is fewer than 200 from 3,000.

Mr. Golding: —and the loss of 200 jobs on Merseyside is as difficult for them to accept as the loss of jobs in Birmingham is to the Birmingham stewards.

Mr. Rooker: Not 3,000.

Mr. Golding: Cadbury-Schweppes told me—and here I am repeating what the firm has told me rather than what the Birkenhead stewards have told me—that, apart from the financial considerations, it took into account the possibility of finding alternative work on Merseyside and in Birmingham. The firm said that it was a real possibility in Birmingham, because there are 1,000 vacancies a year at Bourneville alone, but virtually impossible for those at Moreton.
I do not underestimate the difficulties of redeployment. In fact, I share a lot of the concern of the Birmingham stewards about this point, because of difficulties of travel and because there are married women involved, and because of this I have asked the Manpower Services Commission to look at this carefully with the firm.
We shall take a continuing interest in the welfare of those who will be declared redundant. I am sure, too, that the partnership committee will want to express a point of view. Between now and the closure date we shall do everything to minimise the hardship.
I also realise that we are not dealing only with the problems of individuals. I realise that the loss of jobs to Birmingham and to the partnership area is also an issue. Here I think that there is a real possibility of consultation about the feasibility of an alternative use for the Bordesley Street site. I would expect the


partnership committee on Tuesday to discuss this and to draw some conclusions.
I am sorry that tonight I cannot bring more comfort to my hon. Friends who represent Birmingham seats. This has been a difficult situation from a Government point of view—two groups of workers in desperate trouble. But the rules are such that it has not been possible

for the Government to intervene. In any case, it is a situation in which it would have been a very difficult decision to make, even if we were in a position to make a judgment.

Question put and agreed to.

Adjourned accordingly at ten minutes to Eleven o'clock.